A new MYR72m gas terminal project in Terengganu lifts order book to MYR1.7b (+4%).
External jobflow remains slow and we await the execution of its maiden liftboat jobs.
Maintain HOLD and TP of MYR0.98 (10x FY14 PER).
Assuming 10% net margin for this recent win, we forecast MYR1m- 4m p.a. net profit contribution in FY14-16. Though Eversendai’s new wins YTD have exceeded our assumption of MYR1b for FY14, we are keeping our earnings forecast unchanged due to its recent weak margin.
We also retain our HOLD call as we await the execution of its liftboat jobs, which will commence in 4Q14. Eversendai is new to liftboat jobs and if executed smoothly, the stock could see a rerating and potentially emerge as an Oil & Gas play.
Source: Maybank Research - 9 Sep 2014
External jobflow remains slow and we await the execution of its maiden liftboat jobs.
Maintain HOLD and TP of MYR0.98 (10x FY14 PER).
What’s New
Eversendai has secured the mechanical and steel structure packages contract worth MYR72m for PETRONAS’ Terengganu Gas Terminal Project – Phase 2. This is Eversendai’s first gas terminal job and it was awarded by its long-time customer Samsung. Eversendai’s scope of work includes supply and installation of steel structures as well as the fabrication and erection of piping and mechanical equipment. The job is scheduled to commence in 3Q14 and complete in Apr 2016.What’s Our View
Including the related-party liftboat jobs and this recent win, new wins YTD total MYR1.1b. This is higher than the amount it secured in the past 2 years (FY12: MYR924m, FY13: MYR669m) and will provide earnings clarity for FY15-16. Its total outstanding orderbook stands at MYR1.7b presently (c.+55% QoQ).Assuming 10% net margin for this recent win, we forecast MYR1m- 4m p.a. net profit contribution in FY14-16. Though Eversendai’s new wins YTD have exceeded our assumption of MYR1b for FY14, we are keeping our earnings forecast unchanged due to its recent weak margin.
We also retain our HOLD call as we await the execution of its liftboat jobs, which will commence in 4Q14. Eversendai is new to liftboat jobs and if executed smoothly, the stock could see a rerating and potentially emerge as an Oil & Gas play.
Source: Maybank Research - 9 Sep 2014
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