KUALA LUMPUR: Kenanga research maintained its underperform rating on Eversendai Corp Bhd
with an unchanged target price of 50.5 sen on news the group has secured RM321mil in new projects.
According to the research house, the new contracts bring the group's year-to-date replenishment to RM1.44bil, which exceeds its assumptions of RM1.2bil but adds to its FY19 replenishment assumptions of RM1.3bil, making up 19% of the replenishment target.
"We make no changes to our FY18-19E CNP as the contract wins forms part of our order-book replenishment assumptions."
Kenanga addded that the works are expected to commence in 2019 given that there are only two working days left to 2018.
"Assuming an average PBT margin of 4% and a 36-month span for the contracts, the projects are expected to contribute c.RM3.1m per annum to the bottom-line," it said.
The research house said Eversendai's outstanding order book stands at about RM2.43bil, which provides visibility for the next one to 1.5 years.
It added that the group has received payment of US$36mil for its first lift boat to Vahana in 2Q18.
"We believe that it will not be long before SENDAI receives its remaining payment of USD54m and we expect its net gearing to come off to c.0.81x (from 1.06x as of 3Q18)."
Limited time offer:
Just RM5 per month.
