Eversendai Corp’s Chairman Tan Sri A K Nathan said that he will not be surprised  if  the  company  achieves  the  revenue  forecast  of  RM2bn  one year earlier than the 2017 target, boosted by its oil and gas business. The company  also  announced  that  it  had  secured  new  engineering  and construction services contracts worth RM250m in Malaysia, India and the UAE to surpass the RM1bn mark for new projects in 1H15. (Source: The Star)

Comments: Management’s bullish outlook of achieving their revenue target of  RM2bn  earlier  in  2016  comes  as  a  surprise.  Our  revenue  forecast  is RM1.55bn  in  2016  currently  assuming  its  current  order  book  of  about RM2.25bn (including the RM250m secured recently) will increase to about RM3bn to be completed by 2016. The achievement of its revenue target will  depend  on  its  success  rate  in  winning  the  tendered  projects  worth RM11bn (90% are overseas jobs) currently. We maintain our forecasts for now and reiterate our BUY call with RM1.16 target price, based on FY16E PER of 12x.

Source: Affin Hwang Capital Research - 30 Jun 2015