Eversendai Corp Bhd
(March 3, RM0.72)
Maintain hold rating with an unchanged target price (TP) of 69 sen. With the remaining nine months of this year, we retain our positive view on Eversendai Corp Bhd’s prospects of securing more jobs particularly in the Middle East backed by its strong footing in the region. 

We maintain “hold” rating at an unchanged TP of 69 sen for Eversendai. Our valuation is based on 11.3 times price-earnings ratio (PER) pegged to our financial year ending Dec 31, 2015 (FY15) earnings per share (EPS).

Eversendai has secured a new contract in Qatar for the construction of the Al Wahda Arches and Visitors’ Centre with a project value at around RM269.2 million. 

Despite the latest positive development, we are leaving our forecast unchanged as we have imputed the project value into our FY15 order book replenishment assumption of RM1 billion.

Eversendai has secured a total of RM618.2 million worth of projects in the current financial year. 

Including this project, Eversendai’s outstanding order book in hand will be approximately RM1.7 billion and this should provide earnings visibility for the next two years.

Assuming the pre-tax margin for the project is at around 7%, it is expected to contribute about RM11.3 million and RM7.5 million to Eversendai’s forecast FY15 and FY16 earnings. 

Year-to-date jobs have already met 61.8% of our assumption. 

Nevertheless, we are leaving our FY15 forecast unchanged as it is already imputed into our FY15 order book replenishment of RM1 billion. — BIMB Securities Research, March 3

This article first appeared in The Edge Financial Daily, on March 4, 2015.