Serba Dinamik bullish on 2020 prospects, eyes RM15b orderbook

The company also expects its capex requirement to increase by 20% next year

by SHAZNI ONG/ pic by TMR

SERBA Dinamik Holdings Bhd is bullish on its 2020 prospects with a targeted orderbook of RM15 billion next year as it expects improvements in the US-China trade tensions.

The engineering services company is likely to continue performing well after a good showing this year, its founder and group MD/CEO Datuk Dr Mohd Abdul Karim Abdullah said.

It’s maintaining its annual growth target of about 15% to 20% expansion in top line and bottom line for the financial year ending Dec 31, 2020 (FY20).

“This is something which can be achieved successfully based on the existing orderbook that we have in hand, looking at the existing geopolitical situation of where we are operating and based on the trade war between the US and China which is heading towards a positive outcome.

“With the existing positioning and things which we are putting on, I would say we would be able to end up at an orderbook target of RM15 billion in 2020,” Abdul Karim told reporters after the company’s EGM in Shah Alam, Selangor, yesterday.

The group’s orderbook currently stands at about RM10 billion, he added.

It also expects its capital expenditure (capex) requirement to increase by 20% next year.

Abdul Karim forecasts the US-China trade tensions to be heading towards a positive outcome next year, which would make for smoother interaction in the global supply chain.

“The implications for Serba Dinamik would be positive because a lot of the related network of what we are doing, whether it is related to the products, specialised services or integration of the systems, will always have a certain relationship with the US and China.

“That will also help us in terms of fulfilling and moving forward to realise the orderbooks that we have in hand,” he said.

On whether the group has any merger and acquisition (M&A) plans in the pipeline, Abdul Karim said the group is already eyeing one for FY20 that “will not be very expensive” so as not to stress the firm’s financial capabilities.

“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,” he said.

While the Middle East region has been the group’s largest earnings contributors, the company is also exploring other markets.

“We are putting a lot of effort into Central Asia, namely Uzbekistan, Turkmenistan and Kazakhstan as well as in Africa, namely Tanzania and Senegal.

“In 2020, we will make a stronger positioning in terms of jobs that we are going to secure. Also, we want to reduce dependency on Middle Eastern countries,” Abdul Karim said.

Meanwhile, oil prices generally remain volatile but are on an upward trend, which will boost the sector moving forward, he added.

Earlier at the EGM, Serba Dinamik received the approval from shareholders for three proposed corporate exercises — a two-forthree share split to further improve trading liquidity, a two-for-five bonus issue, and a two-for-five free warrants issue to reward existing shareholders.

The proceeds raised will be used for capex and working capital.

Shares of Serba Dinamik have risen more than 184% for the year-to-date since the group went public in February 2017.

The stock closed 0.24% higher at RM4.26 yesterday, valuing the company at RM6.26 billion.