This article first appeared in The Edge Financial Daily on November 19, 2019

SHAH ALAM: Serba Dinamik Holdings Bhd managing director and chief executive officer Datuk Dr Mohd Abdul Karim Abdullah is upbeat about the company’s prospects for next year, thanks to a better-than-expected order book and favourable growth catalysts from improved trade war sentiments.

After the group’s extraordinary general meeting (EGM) yesterday, Mohd Abdul Karim told reporters that Serba Dinamik remains on a strong footing and expects to continue doing well in FY19.

For FY20, he said the company is maintaining its annual growth target of about 15% to 20% for the top and bottom lines.

“We’ll be able to achieve this based on our order book. It’s currently at about RM10 billion, though the number will be higher by the end of our financial year (Dec 31, 2019),” he said, adding that the figure is higher than that previously. For FY20, the group is targeting an order book of about RM15 billion.

As a global integrated engineering services company, Mohd Abdul Karim said its prospects remain good as improving geopolitical factors favour the group’s business networks.

“The trade war between the US and China is heading towards a positive outcome. That will be good news for the entrepreneurial world because what it means is it will help the entire movement of trade and the supply chain of business will move more smoothly.

“Implications to Serba Dinamik will also be positive because many of our related networks have a relationship with the US and China, so this will help us achieve our order book [target].”

On the outlook for oil and gas, Mohd Abdul Karim said oil prices generally remain volatile but noted they are on an upward trend, boosting the sector moving forward.

On other prospects, he said while the group’s largest market, the Middle East, will still grow, Serba Dinamik wants to reduce dependency on this region, with plans to further expand into other small and existing markets in Central Asia and Africa, in particular, to grow its information technology (IT) segment.

“We expect to be earning about RM150 million [in revenue] for the IT segment, though next year it will be more meaningful. We have sufficient capabilities to launch it bigger in the market.”

On merger and acquisition (M&A) plans in the pipeline, Mohd Abdul Karim said the group is eyeing one for FY20, without elaborating. “What we look for in an M&A is a company that can help enhance the group’s technology infrastructure as well as help with our geopolitical positioning.”

At the group’s EGM, Serba Dinamik received shareholders’ approval for three proposed corporate exercises — a two-for-three share split to further improve trading liquidity, a two-for-five bonus issue and a two-for-five free warrant issue to reward existing shareholders. The proceeds raised will be for capital expenditure and working capital.

Serba Dinamik shares settled one sen higher at RM4.26 yesterday, with a market capitalisation of RM6.26 billion. In the past one year, the stock has gained nearly 12%.