Price Analysis: Serba Dinamik
MYX:SERBADK
BUSINESS
1. O&M: Operation and maintenance (“O&M”) which include maintenance, repair and overhaul of rotating equipment (“MRO”), inspection, repair and maintenance of static equipment and structure (“IRM”), maintenance of process control and instrumentation and other related services.
2. EPCC: Engineering, procurement, construction and commissioning (“EPCC”) which include among others, piping systems, process control and instrumentation, equipment installation, power generation plant, gas compression plant, auxiliary power generation and firefighting system and other related services.
3. ICT: Information, communication and technology (“ICT”) solutions and supply of products and parts which include customize software development, mobile applications solution, e-Commerce platform and digital theme park or virtual park.
4. E&T: Education and training (“E&T”) which includes technical training program that can support our O&M, EPCC and ICT segments as well as involves in tertiary education.
FINANCIAL
Serba Dinamik with Market capital 6.3 billion and 3.7 billion number of shares. Current share price is RM1.71 per share with history price of moving between RM0.72 to RM2.52 per share.
Most important things to notice about are the revenue, net Profit, book Per Share, basic & diluted earning per share of this company increase quarterly and yearly despite COVID pandemic, the current price is still maintaining in range of RM1.5 to RM1.8. You can check about Price to Book Value is 1.84 which is close to the lowest of history 1.64 (history of 1.64-3.4). Price to Earning, Price to Sale and some other valuation indicator showed the same signal of undervalue. From all of the valuation indicators, current price of Serba Dinamik is undervalue. Not to mention about the latest better Quarter Financial Report is out recently recorded 1.8 Billion and 202 Million of revenue and net profit respectively. Both recorded higher compared to last quarter financial report. O&M contributed 82.5% of its revenue.
The estimated value per shares will be above RM2.47 (Latest Financial Report is not Included in calculation). Some research houses maintained their “outperform” ratings on Serba Dinamik, with lowered target prices of RM2.80 and RM2.49 respectively.
FUTURE PROSPECT
On the Oil and Gas front, oil prices grew further in December 2020, supported positive economic rebound and a rapid recovery of oil demand following the rollout of COVID-19 vaccines in several countries. Oil prices also rose on signs of firm crude oil demand in the Asia-Pacific region. The market consolidated further amid the brightening global oil market balance outlook after OPEC and participating non-OPEC countries in the Declaration of Cooperation to voluntarily adjust their production modestly from January this year, and also agreed to extend the compensation period. The Group continue to capture new opportunities in both domestic and international market. 11 new contracts has been awarded to the Group for various countries such as Indonesia, India and Malaysia. As part of our initiative to increase non-oil and gas contribution, 5 contracts from the announced contracts are related to power generation industry.
The Group has also been awarded with an ICT contract to implement smart solutions for development of Smart City and Safe City in India which shows there are more potential demand in the market. With the recent completion of private placement exercise, they start its plan to restore Teluk Ramunia Yard (“TR Yard”) which is located in Kota Tinggi, Johor to rejuvenate the multiple workshops into a hybrid and efficient centre for example a combination of conventional workshop machineries with autonomous Artificial Intelligence (“AI”) element which will enhance the capacity of the machineries and eventually will improve the production output of the operation. They have identified several contracts from its existing orderbook such as chloralkaline plant in Tanzania and Uzbekistan as well as Innovation Hub and Data Centre in Abu Dhabi, UAE to begin modular structure fabrication works using this facility O&M segment will remain as the core business of the Group. The completion of Bintulu Integrated Energy Hub (“BEIH”) will help to support growth of this segment as the facility has state-of-the-art machinery to perform high-end and large-scale maintenance work. EPCC segment is expected to resume growth in coming years. ICT segment has shown significant growth. The Group has setup 5 main division namely Cloud Computing/Data Centre, Financial Technology (“FinTech”), Artificial Intelligence (“AI”), Cybersecurity and Frontier Technology to spur the ICT capabilities moving forward.
E&T segment is also another segment that believe is important to cultivate. E&T segment will not just emphasize on developing future skilled based leaders but as well as to be the Research and Development (“R&D”) arm for them to explore future opportunities. Forging ahead, they will stay to bolster its position in Middle East and South East Asia. They aimed to expand its presence in Central and South Asia and Africa as more prospects within this region. For 2020, they have secured in total 4 new contracts and has penetrated 2 new countries within these 2 regions. Overall, the Group is optimistic moving forward, however remain cautious barring unforeseen circumstances should the current pandemic Covid-19 prolongs.
Sources:
• BNM Quarterly Bulletin, Bank Negara Malaysia
• World Economic Outlook Update January 2021, IMF
• OPEC Monthly January 2021, OPEC
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BUSINESS
1. O&M: Operation and maintenance (“O&M”) which include maintenance, repair and overhaul of rotating equipment (“MRO”), inspection, repair and maintenance of static equipment and structure (“IRM”), maintenance of process control and instrumentation and other related services.
2. EPCC: Engineering, procurement, construction and commissioning (“EPCC”) which include among others, piping systems, process control and instrumentation, equipment installation, power generation plant, gas compression plant, auxiliary power generation and firefighting system and other related services.
3. ICT: Information, communication and technology (“ICT”) solutions and supply of products and parts which include customize software development, mobile applications solution, e-Commerce platform and digital theme park or virtual park.
4. E&T: Education and training (“E&T”) which includes technical training program that can support our O&M, EPCC and ICT segments as well as involves in tertiary education.
FINANCIAL
Serba Dinamik with Market capital 6.3 billion and 3.7 billion number of shares. Current share price is RM1.71 per share with history price of moving between RM0.72 to RM2.52 per share.
Most important things to notice about are the revenue, net Profit, book Per Share, basic & diluted earning per share of this company increase quarterly and yearly despite COVID pandemic, the current price is still maintaining in range of RM1.5 to RM1.8. You can check about Price to Book Value is 1.84 which is close to the lowest of history 1.64 (history of 1.64-3.4). Price to Earning, Price to Sale and some other valuation indicator showed the same signal of undervalue. From all of the valuation indicators, current price of Serba Dinamik is undervalue. Not to mention about the latest better Quarter Financial Report is out recently recorded 1.8 Billion and 202 Million of revenue and net profit respectively. Both recorded higher compared to last quarter financial report. O&M contributed 82.5% of its revenue.
The estimated value per shares will be above RM2.47 (Latest Financial Report is not Included in calculation). Some research houses maintained their “outperform” ratings on Serba Dinamik, with lowered target prices of RM2.80 and RM2.49 respectively.
FUTURE PROSPECT
On the Oil and Gas front, oil prices grew further in December 2020, supported positive economic rebound and a rapid recovery of oil demand following the rollout of COVID-19 vaccines in several countries. Oil prices also rose on signs of firm crude oil demand in the Asia-Pacific region. The market consolidated further amid the brightening global oil market balance outlook after OPEC and participating non-OPEC countries in the Declaration of Cooperation to voluntarily adjust their production modestly from January this year, and also agreed to extend the compensation period. The Group continue to capture new opportunities in both domestic and international market. 11 new contracts has been awarded to the Group for various countries such as Indonesia, India and Malaysia. As part of our initiative to increase non-oil and gas contribution, 5 contracts from the announced contracts are related to power generation industry.
The Group has also been awarded with an ICT contract to implement smart solutions for development of Smart City and Safe City in India which shows there are more potential demand in the market. With the recent completion of private placement exercise, they start its plan to restore Teluk Ramunia Yard (“TR Yard”) which is located in Kota Tinggi, Johor to rejuvenate the multiple workshops into a hybrid and efficient centre for example a combination of conventional workshop machineries with autonomous Artificial Intelligence (“AI”) element which will enhance the capacity of the machineries and eventually will improve the production output of the operation. They have identified several contracts from its existing orderbook such as chloralkaline plant in Tanzania and Uzbekistan as well as Innovation Hub and Data Centre in Abu Dhabi, UAE to begin modular structure fabrication works using this facility O&M segment will remain as the core business of the Group. The completion of Bintulu Integrated Energy Hub (“BEIH”) will help to support growth of this segment as the facility has state-of-the-art machinery to perform high-end and large-scale maintenance work. EPCC segment is expected to resume growth in coming years. ICT segment has shown significant growth. The Group has setup 5 main division namely Cloud Computing/Data Centre, Financial Technology (“FinTech”), Artificial Intelligence (“AI”), Cybersecurity and Frontier Technology to spur the ICT capabilities moving forward.
E&T segment is also another segment that believe is important to cultivate. E&T segment will not just emphasize on developing future skilled based leaders but as well as to be the Research and Development (“R&D”) arm for them to explore future opportunities. Forging ahead, they will stay to bolster its position in Middle East and South East Asia. They aimed to expand its presence in Central and South Asia and Africa as more prospects within this region. For 2020, they have secured in total 4 new contracts and has penetrated 2 new countries within these 2 regions. Overall, the Group is optimistic moving forward, however remain cautious barring unforeseen circumstances should the current pandemic Covid-19 prolongs.
Sources:
• BNM Quarterly Bulletin, Bank Negara Malaysia
• World Economic Outlook Update January 2021, IMF
• OPEC Monthly January 2021, OPEC
Share you love:
https://www.tradingview.com/gopro/?share_your_love=sxw6329
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