Serba Dinamik will be able to leverage on Data Knight’s management team expertise in the technology sector which is in line with Serba Dinamik’s move in reducing the reliance on the O&G industry.
KUCHING: Analysts believe it will be beneficial for Serba Dinamik Holdings Bhd (Serba Dinamik) sponsoring a Nasdaq-listed special purpose acquisition vehicle (SPAC) named Data Knights Acquisition Corp (Data KNights) with a total investment amount of US$5.85 million or about RM24 million.
Via its initial public offering (IPO), Data Knights has commenced trading of its shares on Nasdaq from May 7, 2021, under the ticker symbol “DKDCU”. Data Knights has managed to raise US$100 million of public equity via the offering of 10 million shares priced at US$10 per unit.
Being a SPAC, Data Knight intends to identify and acquire a business focusing on data centres and internet technology sectors.
Researchers with Kenanga Investment Bank Bhd (Kenanga Research) said the move would value add Serba Dinamik’s information and communications technology (ICT) segment growth.
“As at the last closing market cap of US$106 million (last price of US$10.07 per share), Serba Dinamik’s 22.9 per cent stake in the SPAC is now worth approximately US$24 million,” it calculated in its analysis.
“While the investment outlay of US$5.85 million is rather small for a company of Serba Dinamik’s size, with its net-gearing staying relatively steady at one time, we believe the Sarawakian firm is seeking to use this opportunity to enhance value for the group’s ICT segment, as well as fuelling its ambitions to continue growing the segment.
“Nonetheless, we are still overall neutral on this investment for now, given the relatively small impact on Serba Dinamik’s balance sheet. Ultimately, the full impact from this SPAC would depend on the investment outcome of the target acquisition.”
Malacca Securities Sdn Bhd (Malacca Securities) was also neutral on the investment, which is expected to see minimal impact to the group’s profitability over the foreseeable future.
“Still, we believe that Serba Dinamik will be able to leverage on Data Knight’s management team expertise in the technology sector which is in line with Serba Dinamik’s move in reducing the reliance on the oil & gas (O&G) industry.”
“With Brent oil prices now recovering back towards slightly below US$70 per barrel, we believe that major O&G players may accelerate their capex plans. Meanwhile, crude oil rigs in US have now remained above 300 since mid-February 2021 (from slightly below 200 in October 2020) as economic recovery gain traction.
“We made no changes to our earnings estimates and valuation metrics, pending the upcoming quarterly results release at the end of the month.”
On a separate note, the group has also announced the changing of its financial year end to June, from December previously, citing continuing extensions of the movement control order which have hampered the ability to finalise the group’s financial statements.
This means that its upcoming quarterly results — tentatively scheduled for release by this month — will be 5QFY21, instead of 1QFY21.