Serba Dinamik order book surges to RM8b
KUALA LUMPUR: Serba Dinamik Holdings Bhd’s latest three foreign and six local contract deals for a combined RM1 billion have pushed its order book to RM8.3 billion, said Kenanga Research.
The firm has kept its “outperform” call on Serba Dinamik with an unchanged target price of RM4.45.
“We’re positive on the contract wins. Serba Dinamik’s securing of job in Uzbekistan furthers its ambition in the Central Asian market,” it said in a report yesterday.
“We expect Serba Dinamik’s gross margins from the overseas jobs to be around 17 per cent, with the exceptions of competitively bid jobs by Petronas Carigali that typically yield between 12 and 15 per cent margin,” it added.
Serba Dinamik is expected to deliver its strongest quarterly earnings of RM108 million in its fourth quarter ended December last year, on the back of higher operations and maintenance activities ahead of the winter months.
“Going forward, its order book is expected to reach RM10 billion by the end of this year, thus keeping them busy until 2022,” said Kenanga Research.
“We reiterate outperform and a target price of RM4.45, pegged to 15 times of price-to-earnings (PER) ration of 2019 forecast earnings.
“We see sustained earnings growth at 14 times PER ratio and undemanding valuation. It is also our top pick for the oil and gas sector,” it added.