ROBUST GROWTH FOR SERBA DINAMIK

Group to maintain strong performance on back of healthy order book replenishment, says KAF-Seagroatt

SERBA Dinamik Holdings Bhd is expected to maintain its strong performance on the back of robust order book replenishment, said KAF-Seagroatt & Campbell Securities Sdn Bhd.

It initiated coverage on Serba Dinamik with a “buy” recommendation and a target price of RM41.5.

“Serba Dinamik is one of the top players in Malaysia within its own segment in operation and maintenance (O&M) and has performed well in recent years, despite the fall in oil prices since 2014.

“We expect the group to maintain its strong performance on the back of robust order book replenishment,” said KAF-Seagroatt in a report yesterday.

In Malaysia, Serba Dinamik ranks among the top three service providers for maintenance, repair and overhaul of rotating equipment and top four service providers for inspection, repair and maintenance of static equipment.

It expects good earnings growth for Serba Dinamik on the back of healthy order book growth.

“We forecast financial years 2018 to 2020 earnings growth of 18 to 19 per cent, mainly driven by ongoing healthy order book replenishment and growth.”

Serba Dinamik’s order book currently stands at RM6.6 billion, with O&M making up RM4.6 billion and RM2 billion for engineering, procurement, construction and commissioning (EPCC) contracts.

The group aimed to expand its business globally to achieve an order book of RM7.5 billion by year-end, said KAF-Seagroatt.

It said Serba Dinamik had ventured into the asset-ownership business model via equity ownership in several assets that complemented its core businesses.

“These assets provide the group with a source of stable and recurring income. Serba Dinamik also benefits from the EPCC and O&M of these assets, which enhance its existing core businesses,” said KAF-Seagroatt.