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