JF Apex Securities sees fair value of RM1.24 for Eversendai Corp Bhd (ECB), in line with those ascribed on small-to-mid cap construction counters.
"The fair value offers 24 per cent to the last closing price as the share price took a dent following the successive lacklustre results since second half financial year 2013, as well as its inability to replenish its order book with sizable projects.
"We view the price weakness as a good entry opportunity for investors as we like the company for its strong presence in Middle East allowing it to ride on the infrastructure spending wave, foray into the booming oil and gas (O&G) sector, exposure in the power generation sector and niche status."
JF expects earnings to normalise in the coming quarters, while the Variation Order (VO) arising from the projects worth RM35 million to be claimed starting second half financial year 2014 as it hands over the Qatar National Museum project in middle of 2014.
Meanwhile, the group is targeting to secure some sizeable projects in the foreseeable future, which include the Crescent Hotel in Baku, Azerbaijan worth up to RM700 million in final stage of award and Warisan Merdeka in Malaysia with estimated structural steel work of RM400 million which has yet to call for tender, and leveraging on track record in Petronas Twin Towers.
Besides, the group stands a good chance in several local large-scale projects in light of Tun Razak Exchange (TRX), Mass Rapid Transport (MRT) depot and stations, and the Refinery and Petrochemical Integrated Development (RAPID) project by Petronas.
- Business Times
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