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

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Eversendai Corporation Bhd Downgrade to NEUTRAL (from BUY)More contracts in the bag 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 downgradeEversendai 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 secondcontract valued at RM43m is for a conversion hangar in Riyadh.

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.

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

we expect its PATAMI margin to be in a single digit. We estimate thatthese 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.

Earnings unchanged. Therefore, we maintain our FY15 and FY16

forecast unchanged at this juncture.

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.

RETURN STATS

Price (16 March 2015) RM0.815

Target Price RM0.780

Expected Share PriceReturn

-4.3%

Expected Dividend Yield +2.3%

Expected Total Return -2.0%

STOCK INFO

KLCI 1,780.54

Bursa / Bloomberg5205 /

EVSD MK

Board / SectorMain /

Construction

Syariah Compliant Yes

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

Beta (against KLCI) 1.51x

3-mth Avg Daily Vol 1.69m

3-mth Avg Daily Value RM1.08m

Major Shareholders:

Vahana Holdings S/B 71.76%

EPF 6.81%

LTH 5.21%


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MIDF EQUITY BEATTuesday, 17 March 2015

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INVESTMENT STATISTICS

FYE Dec FY12 FY13 FY14 FY15F FY16F

Revenue (RM'm) 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

Source: Company, forecasts by MIDFR

Source: Bloomberg

DAILY PRICE CHART

Hafiz [email protected] 1668


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APPENDIX

PROJECT FACT SHEET

Source: Company data, MIDFR


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MIDF RESEARCH ispart ofMIDF 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 suchcompanies 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 Total return is expected to be >15% over the next 12 months.

TRADING BUYStock price is expected to riseby >15% within 3-months after a Trading Buy rating has been

assigned due to positive newsflow.

NEUTRAL Total return is expected to be between -15% and +15% over the next 12 months.

SELL Total return is expected, by -15% or more, over the next 12 months.

TRADING SELLStock price is expected to fall by >15% within 3-months after a Trading Sell rating has beenassigned 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.

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