Serba Dinamik’s proposed private placement prompts analysts to upgrade
KUALA LUMPUR: Following the announcement of Serba Dinamik Holdings Bhd’s (Serba Dinamik) proposed private placement on Tuesday, analysts hail the move as positive towards the group’s future growth prospects and have prompted them to upgrade their forecasts for the stock.
To recap, Serba Dinamik announced via a bursa filing that the group would be proposing for a private placement exercise that will expand its current share base by up to 10 per cent or 133,500,000 new shares.
Serba Dinamik guided that the rationale for the private placement is to raise requisite funds primarily to finance the group’s capital expenditure for Pengerang eco-Industrial Park (PeIP).
It is also to partly finance the development of Pengerang International Commercial Centre (PICC) and to meet its future obligations for the engineering, procurement, construction and commissioning (EPCC) contract under the Tanzania project.
“We are positive on the exercise as it improves the liquidity and financial position of the company.
“More importantly, this allows Serba Dinamik to have the financial flexibility to expand both its operations and maintenance (O&M) and EPCC businesses which require relatively higher working capital,” said MIDF Amanah Investment Bank Bhd (MIDF Research) in a company update.
Similarly, Public Investment Bank Bhd (PublicInvest Research) also voiced out that the move would be beneficial to the group as its future prospects would be well supported by its core activities in O&M and EPCC and its expansion into international markets, which have historically seen circa 80 per cent of its contracts renewed.
“We believe the Group stands poised to clinch further contract awards and thereby mitigate any untoward effects.
“Serba Dinamik’s gradual shift toward an asset-ownership business model stands it in good stead with upfront EPCC-related income contributions recognized and steady income streams locked-in over the longer-term,” guided the research arm in its company update.