Secures RM288mn of New Jobs

Eversendai has recently secured 7 structural steel projects totalling RM288mn in Dubai, Saudi Arabia, India, Singapore and in the Netherland. They are structural steel works for:

i) In India

3 commercial building towers in Hyderabad, an airport main terminal building and an ITC boiler structure in Chennai;

ii) In Middle East

Saudi Pavilion designed for the Dubai Expo 2020 in Dubai and a suspension bridge project in King Abdullah Financial District, Saudi Arabia;

iii) In Netherland

Engineering and fabrication of a Jacket and Piles contract; and

iv) In Singapore

A data centre project in Singapore.

With these job wins, SENDAI has secured RM890mn of new jobs YTD. Its outstanding order book is estimated at RM2.39bn, translating into 1.4x FY18 revenue.

Our View

Assuming a net margin of 2.2%, these projects are expected to contribute RM6.3mn in net profit or EPS of 0.8sen throughout the construction period.

Impact

We maintain our FY19 to FY21 earnings forecasts as the job wins are within our FY19 order book replenishment assumption of RM1.6bn.

Valuation

No change to our target price of RM0.295, based on 6x CY20 earnings. Maintain Sell as lofty net gearing level of 1.07x as at end-June 2019 remains a concern.

Source: TA Research - 11 Sept 2019