Eversendai’s latest win paves the way for future expansion
Posted on June 23, 2012, Saturday
KUCHING: Eversendai Corporation Bhd’s (Eversendai) recent RM45.9 million-worth contract win places it closer to reaching analysts projected RM1.4 billion order book.
“Eversendai has been appointed as a supplier for the Iron Ore Distribution (Package P-302-Pipe and Cable Rack Structure and Miscellaneous) project at Teluk Rubiah, Perak,” Kenanga Investment Bank Bhd (Kenanga Research) said in its research report.
“The value of the contract is worth RM45.9 million for a period of 12 months and this new contract is within our expectations as it is part of the company’s RM1.4 billion order book replenishment that was earlier forecasted,” it noted.
Year-to-date, Eversendai had a current order book of RM928 million and the newly secured contract of RM45.9 million was within its order book replenishment assumption, it added.
“In-line with our in-house construction sector view, we see the potential of Eversendai further securing steel structural projects from the Economic Transformation Programme and the 10th Malaysia Plan projects,” said Kenanga Research, raising the examples of the Warison Tower, International Financial District and the My Rapid Transit.
Eversendai’s consortium with its partners Mudajaya Group Bhd and Alstom Power System SA, had managed to secure several power plant jobs such as the Tanjung Bin power plant and the Janamanjung plant.
Kenanga Research believed that the jobs would help Eversendai secure more steel structural projects going forward, like the Prai power plant this year.
The research house also expected stronger order book replenishment growth from India as well as the Middle East as Eversendai had also bid for other jobs such as the Abu Dhabi airport expansion and Capital Gate, which was part of the Abu Dhabi National Exhibition Centre.
“We are keeping our financial year 2012 (FY12) to FY13 expected earnings forecasts of RM125 million to RM147 million unchanged as we have factored in RM1.4 billion order book replenishment and this contract is within our forecast,” the report added.
The research house went on to peg a fair value of RM2.33 per share for Eversendai, based on 12 times price earnings ratio on its FY13 expected earnings per share.