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Stocks In Focus MY (Eversendai, IJM, VS Industry) – 06/01/15
Malaysia Daily Bulletin | 06 January 2015

Eversendai Bags RM44 Million Job

Eversendai Corp, a structural steel turnkey contractor, has secured a RM44 million contract through its Dubai subsidiary for the connection design, fabrication, supply and erection of structural steel works for the new 5,000 seat Nas Indoor Futsal and Volleyball Arena, which will be used to host international tournaments.

The company has attributed its success to its strong and established management who have been timely in planning, procurement and execution, its innovative engineers and skilled workforce as well as its excellent engineering and well-equipped fabrication facilities. Its vast experience in structural steel works in different regions such as Malaysia, Singapore, Thailand, the Philippines, Indonesia, and India, demonstrates its ability to meet the increasing demand of clients in its ever-evolving industry.

The organization will continue to uphold its core values of compliance to safety, conformance to quality, adherence to schedule and ensuring consistent client satisfaction, as it continues securing complex and challenging projects across the region, where it has operational presence in various locations.

Significance: The firm will be relying on its strong reputation to bid for upcoming projects in line with the Dubai World Expo 2020 so that it can simultaneously strengthen its position as a global player in the booming construction market in the Middle East.

IJM In New Growth Phase

Kenanga Research said that diversified conglomerate IJM Corp is entering a new growth phase as most of its major drivers have gone into “earnings expansion mode”. Its fat construction order book now totalling RM6 billion would provide five-year earnings visibility and the upcoming completion of IJM Land’s privatisation exercise will boost its net profit by another 20 percent in FY16.

Less than a month after the company clinched RM435 million worth of mixed development contracts, it has secured a RM538.5 million job from Pearl Discovery Development involving the completion of superstructure works for a proposed mixed development in Johor called Puteri Cove Residences last Friday. With this new job, the company’s year-to-date FY15 order book replenishment of RM4.6 billion has exceeded the forecast amount of RM4 billion by 14 percent.

RHB Research said the conglomerate’s record order backlog would back “an earnings renaissance” in its construction division since the prime locations of its new property launches largely located on Penang Island and the Klang Valley would buoy sales despite sectorial headwinds. It added that the Puteri Cove Residences job will fetch of earnings before interest and tax (EBIT) of RM43.1 million over the 33-month construction period, assuming an EBIT margin of 8 percent.

Significance: Kenanga Research maintains an “outperform” call on the company with a target price of RM7.68 (revised up from RM7.66) because of its deep value backed by exciting near and long-term growth prospects.

VS Eyes Niche Market By Producing Unique Products

VS Industry, one of the top-50 electronics manufacturing services (EMS) providers in the world, will focus on niche products for the export market in view of the competitive business environment so that it will be in a better position to fully utilise its strengths and expertise to be more involved in feature-rich and unique products. According to the company, this will put it ahead of its competitors.

With the US economy showing signs of recovery, demand for electrical and electronic products has improved so the firm is currently negotiating with four US-based multinational corporations. It adds that it would probably clinch deals with one of them this year and the other three in 2016. It said the US-based MNC was planning to produce a product for export to the temperate countries which it will be manufacturing in Malaysia.

Meanwhile, the organization has said its strong 40 year reputation for supporting MNCs from Japan, Europe, the United Kingdom and the United States and its good delivery system in undertaking jobs with existing MNCs has helped it secure more new clients while it continues to cater to those already having products in their portfolio.

Significance: The company hopes to attract as many foreign MNCs as possible, especially those from the United States, as they’ve been increasingly outsourcing their manufacturing requirements to Southeast Asia due to its easy access to emerging Asian markets, low manufacturing costs, strong support system and pro-business Government policies.

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