KUALA LUMPUR: Serba Dinamik Holdings Bhd is expected to maintain its strong performance on the back of robust orderbook replenishment, KAF-Seagroatt & Campbell Securities Sdn Bhd said.
The firm initiated coverage on Serba Dinamik with a “buy” recommendation and a price target of RM41.5.
“Serba Dinamik is one of the top players in Malaysia within its own segment in O&M (operation and maintenance) 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 orderbook replenishment,” KAF-Seagroatt said in a report today.
In Malaysia, Serba Dinamik ranks in the top three service providers for maintenance, repair and overhaul (MRO) of rotating equipment and in the top four service providers for inspection, repair and maintenance (IRM) of static equipment.
The firm expects good earnings growth for Serba Dinamik on the back of healthy orderbook growth.
“We forecast financial years 2018 to 2020 earnings growth of 18-19 per cent, largely supported by ongoing healthy orderbook replenishment and growth”
Serba Dinamik’s orderbook currently stands at RM6.6 billion, with O&M making up RM4.6 billion and engineering, procurement, construction and commissioning (EPCC) contracts RM2 billion.
The group aims to expand its business regionally and globally and to achieve an orderbook of RM7.5 billion by year-end, KAF-Seagroatt said.
It said Serba Dinamik had ventured into the asset-ownership business model via equity ownership in several assets that complement 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 enhances its existing core businesses,” KAF-Seagroatt added.