Analysts neutral on Eversendai’s latest contract wins

KUCHING: Eversendai Corporation Bhd’s (Eversendai) latest contract wins garnered neutral views as the contracts remain within their financial year 2017 estimated (FY17E) replenishment target of RM1.8 billion.

The research arm of Kenanga Investment Bank Bhd (Kenanga Research) said this in a recent report, and noted that the contracts is 72 per cent of its target with a remainder of RM0.5 billion to be achieved.

Of note, Eversendai secured projects worth RM557.6 million to date, bringing a total of RM1.3 billion in 2017.

In a statement, the group noted that one of its prominent projects secured this year was with a prominent real estate development arm in India, the Piramal Realty.

The project is called the ‘Piramal Revanta’ project which is expected to be the next referral icon in Mumbai’s skyline.

This was part of five other projects the group secured in India which brings its accumulative contracts total of RM356.9 million.

Aside from that, Eversendai secured RM200.7 million project wins from the Middle East.

On the group’s outlook, Kenanga Research commented that post contract wins, Eversendai’s outstanding order-book stood at circa RM3.2 billion providing visibility for the next two years.

“We note that we have taken a more conservative stance and assume a replenishment target of RM1.8 billion in FY17 vs. management’s target of RM2.5 billion,” it added.

On a separate note, it said, Eversendai’s first lift boat (85 per cent completed) is scheduled for delivery in July 2017 and the second one (55 per cent completed) is scheduled for delivery in FY18.

It commented, “While we understand that the client – VAHANA Holdings – has obtained financing for the first lift boat, we remain cautious on the second lift boat in case it failed to secure financing, potentially raising the risk of impairments.”

Overall, the research team maintained an ‘underperform’ rating on the stock.

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