Eversendai (EVSD) announced that it has been awarded a RM184m contract by Reliance Industries Ltd of India for the supply of steel materials, connection design, engineering and fabrication for the construction of the Dhirubhai Ambani International Convention and Exhibition Centre (DAICEC) in Mumbai. DAICEC will be a mixed-use development located within the Bandra Kurla Complex, a commercial zone in the heart of Mumbai. The scope of work for fabrication will be undertaken by EVSD’s fabrication facilities in Malaysia, Dubai and India and is scheduled to be completed by April 2016. (Source: Bursa Malaysia)
Comment: A positive start to the year, after the group posted lower net profits of RM31.0m (-73% yoy) in 2013 and RM21.2m (-49% yoy) in 9M2014. We remain hopeful that the group will be able to secure at least RM1bn of new external contracts in this financial year to sustain billings and profit forecasts in FY15 and FY16. A stronger Indian economy will certainly boost new contract opportunities in the country for EVSD.
Stock price of EVSD remain depressed. Maintain our FY15E-17E forecasts, target price of RM0.98 (@12x CY15 EPS) and BUY rating.
Source: Affin Hwang Capital Research - 27 Jan 2015
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