17 March 2015 | Corporate Update

Eversendai Corporation Bhd

More contracts in the bag

Downgrade to NEUTRAL (from BUY)

Unchanged Target Price (TP): RM0.78

INVESTMENT HIGHLIGHTS

Eversendai won two structural steel jobs in Saudi Arabia worth

RM246m. We estimate that these new contracts will raise its
order book to RM2.3b from RM2.0b.

We maintain our earnings forecasts at this juncture.

Due to the recent run-up in its share price, we downgrade

Eversendai to NEUTRAL from BUY recommendation with an
unchanged TP of RM0.78.

Two structural steel jobs secured in Saudi Arabia. Eversendai, via its
subsidiaries in Saudi Arabia, has recently secured two new contracts
worth RM246m. The first contract valued at RM203m is awarded by
BACS JV (comprising of Saudi Arabian Bechtel Co., Almabani General
Contractors and Consolidated Contractors Co. WLL). The Group will
undertake construction of the East, North & South Depots of the Riyadh
Metro project - Package 1 (Lines 1 and 2) for the Riyadh Development
Authority - which is scheduled to be completed in 4Q2016. The second
contract valued at RM43m is for a conversion hangar in Riyadh.

RETURN STATS
Price (16 March 2015)

RM0.815

Target Price

RM0.780

Expected Share Price

Return

-4.3%

Expected Dividend Yield

+2.3%

Expected Total Return

-2.0%

STOCK INFO
KLCI
Bursa / Bloomberg
Board / Sector

1,780.54
5205 /
EVSD MK
Main /
Construction

Syariah Compliant

Yes

Order book has risen to RM2.3b. Eversendai has already replenished

72% or RM864m of our FY/CY15 new jobs assumption of RM1.2b.
Although the jobs win came in within our expectation, we believe the
above contracts will help the Group to secure more work packages in
the USD22.5b Riyadh Metro development. With these new projects,
Eversendais outstanding order book now stands at RM2.3b.

Issued shares (mil)

773.9

Par Value (RM)

0.50

Market cap. (RMm)

630.7

Price over NTA

0.70x

52-wk price Range

RM0.49-RM1.14

Expect tight margin. Despite of the strong inflow of contract awards,

we expect its PATAMI margin to be in a single digit. We estimate that
these contracts will contribute between RM15m and RM20m based on
margins of 6-8%, to be spread over FY15 and FY16 earnings. We
believe that any improvements in its margin will depend on the extent of
cost control on its outstanding works execution. The low PATAMI margin
is based on expectation that the Group still needs to incur additional
operating cost for undertaking Oil & Gas development projects in FY15.

Beta (against KLCI)

1.51x

3-mth Avg Daily Vol

1.69m

Earnings unchanged. Therefore, we maintain our FY15 and FY16

forecast unchanged at this juncture.

3-mth Avg Daily Value

RM1.08m

Major Shareholders:
Vahana Holdings S/B

71.76%

EPF

6.81%

LTH

5.21%

Downgrade to NEUTRAL. Pursuant to recent run-up in its share price,

we downgrade Eversendai to NEUTRAL with an unchanged TP of
RM0.78. We believe the share price is now fully valued based on its
forward earnings prospects. Hence, we see a limited near-term upside
potential.

KINDLY REFER TO THE LAST PAGE OF THIS PUBLICATION FOR IMPORTANT DISCLOSURES

MIDF EQUITY BEAT

Tuesday, 17 March 2015
INVESTMENT STATISTICS
FYE Dec

FY12

FY13

FY14

FY15F

FY16F

1,021.3

965.1

1,002.8

1,052.0

1,056.0

EBIT (RM'm)

154.8

87.0

66.1

80.9

86.5

Pre-tax Profit (RM'm)

137.0

39.5

45.8

54.7

62.5

Normalised PATAMI (RM'm)

114.1

53.7

33.4

48.4

51.8

EPS (sen)

14.9

6.9

4.3

6.3

6.7

EPS growth (%)

-3.2

-53.7

-37.7

45.5

7.1

PER (x)

8.9

26.0

19.0

13.0

12.2

Net Dividend (sen)

4.0

1.0

1.3

1.9

2.0

Net Dividend Yield (%)

3.0

1.0

1.6

2.3

2.5

Revenue (RM'm)

Source: Company, forecasts by MIDFR

DAILY PRICE CHART

Hafiz Hassan
mohd.hafiz@midf.com.my
03-2772 1668
Source: Bloomberg

MIDF EQUITY BEAT

Tuesday, 17 March 2015

APPENDIX
PROJECT FACT SHEET

Source: Company data, MIDFR

MIDF EQUITY BEAT

Tuesday, 17 March 2015

MIDF RESEARCH is part of MIDF Amanah Investment Bank Berhad (23878 - X).
(Bank Pelaburan)
(A Participating Organisation of Bursa Malaysia Securities Berhad)

DISCLOSURES AND DISCLAIMER

This report has been prepared by MIDF AMANAH INVESTMENT BANK BERHAD (23878-X). It is for
distribution only under such circumstances as may be permitted by applicable law.
Readers should be fully aware that this report is for information purposes only. The opinions contained
in this report are based on information obtained or derived from sources that we believe are reliable.
MIDF AMANAH INVESTMENT BANK BERHAD makes no representation or warranty, expressed or
implied, as to the accuracy, completeness or reliability of the information contained therein and it should
not be relied upon as such.
This report is not, and should not be construed as, an offer to buy or sell any securities or other financial
instruments. The analysis contained herein is based on numerous assumptions. Different assumptions
could result in materially different results. All opinions and estimates are subject to change without
notice. The research analysts will initiate, update and cease coverage solely at the discretion of MIDF
AMANAH INVESTMENT BANK BERHAD.
The directors, employees and representatives of MIDF AMANAH INVESTMENT BANK BERHAD may
have interest in any of the securities mentioned and may benefit from the information herein. Members
of the MIDF Group and their affiliates may provide services to any company and affiliates of such
companies whose securities are mentioned herein This document may not be reproduced, distributed or
published in any form or for any purpose.

MIDF AMANAH INVESTMENT BANK : GUIDE TO RECOMMENDATIONS

STOCK RECOMMENDATIONS
BUY
TRADING BUY
NEUTRAL
SELL
TRADING SELL

Total return is expected to be >15% over the next 12 months.

Stock price is expected to rise by >15% within 3-months after a Trading Buy rating has been
assigned due to positive newsflow.
Total return is expected to be between -15% and +15% over the next 12 months.
Total return is expected, by -15% or more, over the next 12 months.
Stock price is expected to fall by >15% within 3-months after a Trading Sell rating has been
assigned due to negative newsflow.

SECTOR RECOMMENDATIONS
POSITIVE

The sector is expected to outperform the overall market over the next 12 months.

NEUTRAL

The sector is to perform in line with the overall market over the next 12 months.

NEGATIVE

The sector is expected to underperform the overall market over the next 12 months.