‘Serba Dinamik may win more deals’
KUALA LUMPUR: Serba Dinamik Holdings Bhd may announce more contract wins before the end of the year, driven by its current RM11 billion tender book.
Kenanga Research said Serba Dinamik had targeted to achieve an order book of RM7.5 billion by year-end, short of RM300 million.
“There is no change to its earnings, as it is still within the replenishment of RM3 billion, and we expect more contract wins before year-end,” said the research firm in a note.
Serba Dinamik said on Thursday it had secured 13 new operations and maintenance contracts — four in the Middle East — worth RM512.17 million.
Kenanga Research was positive on the news as the contracts bring Serba Dinamik’s year-to-date new wins to RM2.2 billion and its order book to RM7.2 billion.
“The 13 contracts won by Serba Dinamik not only signify the oil and gas company’s strong footing in the Middle East but also demonstrates its competitiveness in the local scene,” it said.
The rest are local contracts, with an undisclosed value as they are on call-out basis, but Kenanga Research estimates them to be around RM100 million.
Kenanga Research has maintained an “outperform” call on Serba Dinamik, with a target price of RM4.45.
“We continue to like Serba Dinamik. It’s our top pick within the oil and gas sector, given its consistent and commendable track record of earnings growth delivery,” it said.
“Other factors include Serba Dinamik’s dynamic expansion into new markets through inorganic growth and superior return on equity among its peers — 22 per cent versus the sector’s average of eight per cent.”