Given the pace of new contract wins, Serba Dinamik remains on track to reach management’s outstanding order book target of RM10 billion by end-financial year 2019 forecast.
KUCHING: Serba Dinamik Holdings Bhd’s (Serba Dinamik) new contract wins have garnered positive reactions from analysts as a strong indicator of its strong job execution capabilities as well as competitiveness in securing new contracts.
In a filing to Bursa Malaysia, Serba Dinamik’s board of directors announced that wholly-owned subsidiary Serba Dinamik International Ltd secured one operations and maintenance (O&M) contract.
Another wholly-owned subsidiary Serba Dinamik Sdn Bhd secured two O&M contract and two engineering, procurement, construction and commissioning (EPCC) contracts.
The combined estimated contract value of the contracts secured above is US$163 million (equivalent to approximately RM682.81 million).
“Among the domestic contract wins is one appointment of being a panel contractor by Petroliam Nasional Bhd (Petronas), for the provision of mechanical rotating equipment services and parts,” the research arm of Kenanga Investment Bank Bhd (Kenanga Research) noted.
“While this is not a job specific contract per se, it qualifies Serba Dinamik to be able to compete for and secure mechanical rotating maintenance jobs locally.”
Excluding this appointment as a panel contractor, Kenanga Research guesstimated the two other domestic contract wins to be worth approximately RM100 million, thereby bringing the total contract value announced yesterday to roughly RM783 million.
According to Kenanga Research, this brought the group’s year to date (YTD) contract win to roughly RM3.2 billion (broadly in-line with the research arm’s replenishment assumption of RM3 billion), and latest order-book to approximately RM9.7 billion (broadly in-line with management’s end-2019 target of RM10 billion).
“Note that these figures do not include the panel contractor agreement by Petronas, and hence, any successful work order materialisation from that contract will further boost the order-book.”
“Overall, we are positive on the new wins, highlighting the company’s job execution capabilities as well as competitiveness in securing new jobs.”
Meanwhile, given the pace of new contract wins, AmInvestment Bank Bhd (AmInvestment Bank) also believed that Serba Dinamik remains on track to reach management’s outstanding order book target of RM10 billion by end-financial year 2019 forecast (FY19F).
“This implies an impressive order book growth of 33 per cent year on year (y-o-y) and a potential FY19F revenue growth of 18 per cent to 20 per cent, which is above our conservative assumption of 16 per cent,” the research firm said.
“Management expects the continuation of strong revenue growth this year driven by growing demand in the Middle East and Southeast Asia, spearheaded by the UAE and Qatar.”