Malaysia Company Guide

Serba Dinamik Holdings

Version 1 | Bloomberg: SDH MK | Reuters: SERB.KL Refer to important disclosures at the end of this report

DBS Group Research . Equity 14 Aug 2017

BUY The next big thing

Last Traded Price ( 11 Aug 2017): RM1.91 (KLCI : 1,766.96) Strength in diversification. We note that geographical
Price Target 12-mth: RM2.90 (52% upside) (Prev RM2.90) diversification is one of Serba’s key strengths and this is what
sets it apart from its local peers. Diversification has proven to
Analyst support its phenomenal FY13-FY16 earnings CAGR of 63% as
Inani Rozidin +603 2604 3905 inanirozidin@alliancedbs.com
when jobs from one market plateau, jobs from another market
pick up the slack. We expect the Middle East to remain Serba’s
What’s New main revenue contributor in FY17-FY19. Although overall
 In-line 2QFY17 earnings margins are expected to be weaker in FY17F, we expect to see
progressive improvement in the group’s operating margins in
 Strength in global diversification FY18/FY19 due to increasing contribution by Middle East
 Growth will be driven by Middle East and potential for contracts with higher margins.
additional jobs in Sarawak and Johor
Where we differ. Our target price and earnings forecast are
 Reiterate BUY with TP of RM2.90
more bullish than consensus. We are confident of Serba’s
performance as its O&M business caters to production activities
which are more resilient despite oil price volatility. Furthermore,
Price Relative
RM Relative Index
as a third-party O&M provider, it is able to gain market share
2.4 209 from OEM providers given its price competitiveness.
2.2 189

169
2.0

1.8
149

129
Potential catalyst from above-expectation earnings and better
1.6 109 margins. We forecast revenue/operating profit to grow at a 3-
1.4 89
Feb-17 May-17 Aug-17
year CAGR of 24%/25% in FY16-FY19. This will be supported
by: 1) stronger market reputation and penetration, 2) higher
Serba Dinamik Holdings (LHS) Relative KLCI (RHS)

demand for maintenance services, and 3) expansion of EPCC

Forecasts and Valuation
FY Dec (RM m) 2016A 2017F 2018F 2019F
work. We believe there is room for further upside to our
Revenue 2,155 2,745 3,319 3,956 earnings owing to potential higher contract wins and margins.
EBITDA 342 424 525 644
Pre-tax Profit 274 337 420 516 Valuation:
Net Profit 253 305 384 473 Our SOP target price is at RM2.90, based on 9% WACC for its
Net Pft (Pre Ex.) 253 305 384 473
utility assets and 12x FY17F PE for its O&M and EPCC
Net Pft Gth (Pre-ex) (%) 61.2 20.6 25.9 23.3
EPS (sen) 18.9 22.8 28.7 35.4 segments, which is in line with the average CY17 PE for small-
EPS Pre Ex. (sen) 18.9 22.8 28.7 35.4 mid cap O&G maintenance service providers.
EPS Gth Pre Ex (%) 61 21 26 23
Diluted EPS (sen) 18.9 22.8 28.7 35.4
Key Risks to Our View:
Net DPS (sen) 0.0 6.85 8.62 10.6
BV Per Share (sen) 60.6 86.8 107 132 Political risk in operational countries. Following the selldown
PE (X) 10.1 8.4 6.6 5.4 after the blockade of Qatar, Serba’s share price is sensitive to
PE Pre Ex. (X) 10.1 8.4 6.6 5.4 any adverse geopolitical developments. However, we believe
P/Cash Flow (X) 45.2 6.9 8.5 6.5
EV/EBITDA (X) 8.8 7.0 5.8 4.8
Serba is fundamentally strong and globally diversified to
Net Div Yield (%) 0.0 3.6 4.5 5.6 withstand any geopolitical risks emanating from one country.
P/Book Value (X) 3.2 2.2 1.8 1.5 At A Glance
Net Debt/Equity (X) 0.5 0.3 0.3 0.3 Issued Capital (m shrs) 1,335
ROAE (%) 39.6 31.0 29.7 29.7 Mkt. Cap (RMm/US$m) 2,550 / 594
Earnings Rev (%): 0 0 0 Major Shareholders (%)
Consensus EPS (sen): 21.5 23.3 28.6 Dato’ Karim 26.2
Other Broker Recs: B: 4 S: 0 H: 0 Hj Abdul Kadier 20.7
Dato’ Awang Daud 13.2
Source of all data on this page: Company, AllianceDBS, DBS Bank, Free Float (%) 39.9
Bloomberg Finance L.P 3m Avg. Daily Val (US$m) 2.3
ICB Industry : Oil & Gas / Oil Equipment; Services & Distribution

ed: CK/ sa:BC, PY

Company Guide
Serba Dinamik Holdings

WHAT’S NEW
More good things to come

 Serba reported 2Q17 earnings of RM83m (+509% y-o-y,
+6% q-o-q), which is in line with our estimate but above
consensus‘. Revenue came in at RM650m (+328% y-o-y,
+6% q-o-q). Note that y-o-y comparisons are not
meaningful as 2Q16 results cover the period from 25
May 2016 to 30 June 2016.
 Net margins remained at 12.8% in 2Q17 from 1Q17, in
contrast to FY16’s 11.7% and 4Q16’s 13.2%.
 We understand that 3Q is seasonally the weakest quarter
and earnings are likely to rebound in 4Q. We are
expecting FY17F net margins to drop to 11.1% due to
pricing pressure from Malaysian business operations.
However, this is expected to recover progressively due to
higher contributions from Middle East contracts with
better margin over the coming years.
 Serba declared a dividend of 1.50 sen in 2Q17, implying
a payout of 24%.
Performance review by business segments
 The O&M segment contributed 83%/109% of total
revenue/operating profit in 2Q17. Operating margins
stabilised at 17.8% in 2Q17 from 17.7% in 1Q17, vs
15.7% for FY16 and 18% for 4Q16.
 The EPCC segment contributed 17%/23% of total
revenue/operating profit in 2Q17. Operating margins
improved to 18.2% in 2Q17, compared to 1Q17’s 16.5%,
FY16’s 14.4% and 4Q16’s 17.2%.
 In 2Q17, the Middle East/Malaysia contributed 61%/24%
of revenue (1Q17: 65%/32%, FY16: 51%/35%). We
noted that the shift in geographical revenue breakdown is
due to lower contributions from Malaysia and flattish
growth in contributions from the Middle East. We also
note Turkmenistan contributed 8% of revenue in 2Q17
(1Q17: 0%). As some of Serba’s contracts have different
accretion periods, we believe geographical contributions
will normalise as the year progresses.

Quarterly / Interim Income Statement (RMm)

FY Dec 2Q2016* 1Q2017 2Q2017 % chg yoy % chg qoq

Revenue 152 612 650 327.6 6.1

Cost of Goods Sold (124) (505) (534) 329.6 5.7
Gross Profit 27.8 108 116 318.5 8.0
Other Oper. (Exp)/Inc (9.2) (17.6) (19.8) 115.3 12.5
Operating Profit 18.6 90.0 96.4 418.9 7.1
Other Non Opg (Exp)/Inc 0.0 0.0 0.0 nm nm
Associates & JV Inc 0.0 (0.4) (1.1) nm 153.1
Net Interest (Exp)/Inc (3.5) (8.3) (7.0) (99.0) 16.3
Exceptional Gain/(Loss) 0.0 0.0 0.0 nm nm
Pre-tax Profit 15.1 81.2 88.3 486.0 8.7
Tax (1.4) (3.9) (5.4) 290.6 39.9
Minority Interest 0.0 1.00 0.28 nm (71.9)
Net Profit 13.7 78.3 83.2 508.6 6.2
Net profit bef Except. 13.7 78.3 83.2 508.6 6.2
EBITDA 18.6 105 113 506.1 7.0
Margins (%)
Gross Margins 18.3 17.6 17.9
Opg Profit Margins 12.2 14.7 14.8
Net Profit Margins 9.0 12.8 12.8

Source of all data: Company, AllianceDBS, DBS Bank

*Comparative figures for the preceding year are presented from the date the company commenced operations on 25 May 2016 prior to its listing.

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 Company Guide
Serba Dinamik Holdings

O&M orderbook replishment (RM'm)

CRITICAL DATA POINTS TO WATCH
3000 3000
Growth momentum to be sustained going forward. We 3030.0

conservatively forecast Serba’s revenue/earnings to grow at a 3-year 2597.1 2500

CAGR of 22%/23% over FY16-FY19F. This is underpinned by its 2164.3

existing O&M and EPCC orderbook of RM4bn and RM700m 1731.4

respectively. In addition, we expect Serba to gain further traction in 1298.6

the Middle East while its effort to expand its revenue sources with 865.7

EPCC and recurring income from utility assets will pay off over the 432.9

longer term. 0.0

2017F 2018F 2019F

O&M segment to drive growth. Serba’s O&M revenue grew at a 3- Revenue weightage Malaysia (%)
year CAGR of 66% from FY13-FY16. The O&M segment 0.36
0.4
contributed c.89%/110% of revenue/operating profit in FY16. As 0.33 0.34

oil prices recover and stabilise over the longer term, we expect 0.3
0.29 0.29

operational activities to return which would lead to more demand

0.2
for maintenance work. We forecast this segment to remain Serba’s
main revenue/operating profit contributor with a 3-year CAGR of 0.1

23%/24% in FY17-FY19.
0.1

Key market is Middle East. Middle East revenue contribution grew 0.0
2015A 2016A 2017F 2018F 2019F
from 19.5% in FY13 to c.51% in FY16 at RM1.1bn, mainly from
the UAE, Qatar and Oman. This translates to a 3-year Revenue weightage Middle East (%)
revenue/operating profit CAGR of 123%/98% for FY13-FY16. We 0.58
0.59 0.55 0.56 0.56
forecast revenue/operating profit to grow at a 3-year CAGR of 0.51
24%/25% in FY16-FY19. This will be supported by: 1) stronger 0.47

market reputation and penetration, 2) higher demand for

0.35
maintenance services, and 3) expansion of EPCC work. We expect
the Middle East to remain Serba’s main revenue contributor in 0.23

FY17-FY19. Although overall margins are expected to be weaker in

0.12
FY17F due to competitive pricing pressure for Malaysia business,
we expect to see progressive improvement in the group’s operating 0.00

margins in FY18/FY19 due to increasing contribution by Middle 2015A 2016A 2017F 2018F 2019F

East’s contracts with higher margins. O&M operating margins (%)

0.2 0.16 0.16 0.16 0.16
Development of industrial park in Sarawak. The group plans to
develop a centralised utility facility (CUF) that provides electricity, 0.1

steam, chilled water, demineralised water, wastewater treatment, 0.1

industrial gases and compressed air in Bintulu, Sarawak. Upon
0.1
completion of the industrial park, the group aims to operate and
maintain the CUF while the management of the industrial 0.0

properties within the park would be subcontracted to an external

0.0
party. Details of this plan are still in the preliminary stage. We noted 2015A 2016A 2017F 2018F 2019F
that Serba has presence in the state’s O&G maintenance service
industry. We believe Serba is slated to win additional contracts as EPCC operating margins (%)
more O&G investments pour into Sarawak. 0.2 0.16 0.16 0.16
0.15
0.14
New fabrication facility to support EPCC works and IRM services in 0.1

Southern Johor. Serba has allocated RM20m of its IPO proceeds for 0.1
a new fabrication facility to support EPCC works and IRM services
in Southern Johor. This is to support its EPCC jobs for the Refinery 0.1

and Petrochemical Integrated Development (RAPID) and for future 0.0

projects in the Pengerang Integrated Petroleum Complex (PIPC).
0.0
2015A 2016A 2017F 2018F 2019F

Source: Company, AllianceDBS, DBS Bank

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Company Guide
Serba Dinamik Holdings

Appendix 1:
Serba’s share price performance
RM Index
2.4 C D E F G 2000
A B 1950
2.2
1900
2 1850
1800
1.8
1750
1.6 1700
1650
1.4
1600
1.2 1550
Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17
Share Price (LHS) FBMKLCI Index (RHS)
Source: Bloomberg L.P., AllianceDBS

A – On 8 Feb 2017, Serba was listed on the Main Market of Bursa Malaysia.

B – On 6 Apr 2017, Serba announced award of five operational and maintenance (O&M) contracts worth RM469m – four in
Malaysia and one in Qatar.

C – On 19 Apr 2017, Serba entered into an MOA with Nicol & Andrew Group PLC (N&A) on 19 Apr 2017 to set out an Exclusive
Service Partnership for MRO and onsite maintenance services for O&G, petrochemical, oleochemical, marine, plantation, energy,
power production and distribution, water and waste water as well as general industries.

D – On 2 May 2017, Serba entered into an MOU to form a consortium with EAG Capital Sdn Bhd and the Kingdom of Bahrain.
The intention of the MOU is to conduct a feasibility study for an integrated solid waste management and water desalination plant
in Bahrain.

E – The share price of Serba Dinamik (Serba) dropped following news of Saudi Arabia, Bahrain, the United Arab Emirates (UAE),
Egypt, Yemen, Libya and Maldives cutting diplomatic ties with Qatar over the latter’s alleged support of terrorist groups.

F – On 25 July 2017, Serba announced award of six operational and maintenance (O&M) contracts worth RM523m – four in
Malaysia and two in the United Arab Emirates (UAE).

G – We believe the sell down during the period was attributable to profit-taking activities by its pre-IPO investors (which currently
owns c.3% stake.).

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 Company Guide
Serba Dinamik Holdings

Leverage & Asset Turnover (x)

Balance Sheet: 1.5
1.00
Strong balance sheet with low gearing. Despite expanding 1.5
rapidly in the past few years, Serba managed to register net 0.80
1.4
gearing at c.0.3x in FY16 due to its strong earnings growth and 0.60
healthy cashflow generation. Moving forward, we expect net 1.4

gearing to stabilise at 0.3x amid increase in capex for expansion 0.40

1.3
of its business and operational facilities. 0.20 1.3

0.00 1.2
Share Price Drivers: 2015A 2016A 2017F 2018F 2019F
New contract wins. Serba’s price movement is sensitive to news Gross Debt to Equity (LHS) Asset Turnover (RHS)

of new contract wins, as seen throughout the year when the

Capital Expenditure
share price rose during periods with active newsflow of new RMm
contract wins. 400.0
350.0
300.0
Political risk in operational countries. Following the sharp 250.0
selldown after the blockade of Qatar, Serba’s share price is 200.0

highly sensitive to any adverse geopolitical developments. 150.0

However, we believe Serba is fundamentally strong and globally 100.0

50.0
diversified to withstand any geopolitical risks from one country.
0.0
2015A 2016A 2017F 2018F 2019F

Key Risks: Capital Expenditure (-)

Lower-than-expected orderbook replenishment. The O&M ROE (%)

outstanding orderbook is at RM4bn as at end-March 2017
40.0%
while the EPCC outstanding orderbook is at RM700m. In order
35.0%
to sustain its historical topline growth, Serba needs to secure 30.0%
an orderbook replenishment of RM3-4bn annually. We are 25.0%
positive of Serba’s capability to replenish its current orderbook 20.0%
as it remains competitive in the local and Middle East markets 15.0%
and continues to grab market share from original equipment 10.0%

manufacturers (OEM). 5.0%

0.0%
2015A 2016A 2017F 2018F 2019F
Lower-than-expected margins. Lower-than-expected margins
could dampen the momentum of Serba’s earnings growth in Forward PE Band (x)
comparison to its top-line growth A -/+ 0.1% shift in O&M (x)
9.7
and EPCC operating margins would affect earnings by -/+ 9.2
0.75% and -/+0.08%, resulting in our fair value to 8.7
increase/decrease by 0.6% and 0.07% respectively. 8.2
+2sd: 8.5x
+1sd: 8x
7.7
Avg: 7.5x
Share overhang. CMS Opus Private Equity Sdn Bhd who is a 7.2
-1sd: 7x
pre-IPO investor of Serba is not subject to any moratorium post 6.7
-2sd: 6.5x
listing of Serba. We understand that they collectively own 6.2

c.3% stake (May 2017: 6%) in Serba. Any selldown by the 5.7
Feb-17 May-17 Aug-17
pre-IPO investor will lead to share overhang in the near term.
PB Band (x)
Company Background 3.5
(x)
Serba Dinamik is an energy services group that provides 3.3
engineering solutions to the oil and gas (O&G) and power
3.1
generation industries. It has presence in Malaysia, Indonesia, +2sd: 3.01x
2.9
Qatar, the UAE, KSA, Oman, Bahrain, India and Turkmenistan. +1sd: 2.84x
2.7 Avg: 2.68x
2.5 -1sd: 2.52x
-2sd: 2.36x
2.3

2.1
Feb-17 May-17 Aug-17

Source: Company, AllianceDBS, DBS Bank

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Company Guide
Serba Dinamik Holdings

Key Assumptions
FY Dec 2015A 2016A 2017F 2018F 2019F
O&M orderbook replishment (RM'm) - - 2,500 3,000 3,000
Revenue weightage Malaysia (%) 29% 29% 33% 34% 36%
Revenue weightage Middle East (%) 51% 58% 55% 56% 56%
O&M operating margins (%) 17% 16% 16% 16% 16%
EPCC operating margins (%) 16% 14% 15% 16% 16%

Segmental Breakdown
FY Dec 2015A 2016A 2017F 2018F 2019F
Revenues (RMm)
O&M 1,275 1,917 2,452 2,941 3,565
EPCC 125 233 288 348 361
Total 1,403 2,155 2,745 3,319 3,956
Segmental profit (RMm)
O&M 212 302 382 459 557
EPCC 19.9 33.6 42.3 54.8 59.1
Total 160 274 337 420 516
Segmental profit Margins
O&M
(%) 16.6 15.7 15.6 15.6 15.6
EPCC 15.9 14.4 14.7 15.7 16.4
Total 11.4 12.7 12.3 12.6 13.0

Income Statement (RMm)

FY Dec 2015A 2016A 2017F 2018F 2019F
Revenue 1,403 2,155 2,745 3,319 3,956
Cost of Goods Sold (1,170) (1,762) (2,333) (2,816) (3,346)
Gross Profit 232 393 412 503 610
Other Opng (Exp)/Inc (50.4) (83.1) (40.1) (43.7) (48.1)
Operating Profit 182 310 372 460 562
Other Non Opg (Exp)/Inc 2.59 0.0 0.0 0.0 0.0
Associates & JV Inc 0.0 0.0 0.0 0.0 0.0
Net Interest (Exp)/Inc (25.1) (35.3) (35.1) (40.0) (46.3)
Exceptional Gain/(Loss) 0.0 0.0 0.0 0.0 0.0
Pre-tax Profit 160 274 337 420 516
Tax (3.0) (22.1) (32.2) (35.9) (42.5)
Minority Interest 0.16 0.32 0.0 0.0 0.0
Preference Dividend 0.0 0.0 0.0 0.0 0.0
Net Profit 157 253 305 384 473
Net Profit before Except. 157 253 305 384 473
EBITDA 210 342 424 525 644
Growth
Revenue Gth (%) 85.6 53.6 27.4 20.9 19.2
EBITDA Gth (%) 113.2 62.9 23.8 24.0 22.7
Opg Profit Gth (%) 112.2 70.0 20.1 23.6 22.3
Net Profit Gth (Pre-ex) (%) 145.3 61.2 20.6 25.9 23.3
Margins & Ratio
Gross Margins (%) 16.6 18.2 15.0 15.2 15.4
Opg Profit Margin (%) 13.0 14.4 13.5 13.8 14.2
Net Profit Margin (%) 11.2 11.7 11.1 11.6 12.0
ROAE (%) 42.5 39.6 31.0 29.7 29.7
ROA (%) 16.5 15.6 14.0 14.8 15.3
ROCE (%) 16.9 17.5 16.3 17.1 17.7
Div Payout Ratio (%) 0.0 0.0 30.0 30.0 30.0
Net Interest Cover (x) 7.2 8.8 10.6 11.5 12.1
Source: Company, AllianceDBS, DBS Bank

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 Company Guide
Serba Dinamik Holdings

Quarterly / Interim Income Statement (RMm)

FY Dec 2Q2016 3Q2016 4Q2016 1Q2017 2Q2017

Revenue 152 512 732 612 650

Cost of Goods Sold (124) (413) (601) (505) (534)
Gross Profit 27.8 98.6 131 108 116
Other Oper. (Exp)/Inc (9.2) (45.5) (17.9) (17.6) (19.8)
Operating Profit 18.6 53.1 113 90.0 96.4
Other Non Opg (Exp)/Inc 0.0 0.0 0.0 0.0 0.0
Associates & JV Inc 0.0 0.0 0.0 (0.4) (1.1)
Net Interest (Exp)/Inc (3.5) (4.7) (9.1) (8.3) (7.0)
Exceptional Gain/(Loss) 0.0 0.0 0.0 0.0 0.0
Pre-tax Profit 15.1 48.4 104 81.2 88.3
Tax (1.4) (2.6) (7.2) (3.9) (5.4)
Minority Interest 0.0 0.72 (0.2) 1.00 0.28
Net Profit 13.7 46.5 96.5 78.3 83.2
Net profit bef Except. 13.7 46.5 96.5 78.3 83.2
EBITDA 18.6 65.1 125 105 113

Growth
Revenue Gth (%) N/A 236.6 43.1 (16.3) 6.1
EBITDA Gth (%) nm 250.4 92.3 (15.9) 7.0
Opg Profit Gth (%) nm 185.8 112.9 (20.4) 7.1
Net Profit Gth (Pre-ex) (%) nm 240.1 107.7 (18.8) 6.2
Margins
Gross Margins (%) 18.3 19.3 17.9 17.6 17.9
Opg Profit Margins (%) 12.2 10.4 15.4 14.7 14.8
Net Profit Margins (%) 9.0 9.1 13.2 12.8 12.8

Balance Sheet (RMm)

FY Dec 2015A 2016A 2017F 2018F 2019F

Net Fixed Assets 349 490 810 1,011 1,250

Invts in Associates & JVs 12.2 12.2 12.2 12.2 12.2
Other LT Assets 4.39 4.85 4.85 4.85 4.85
Cash & ST Invts 199 199 257 256 304
Inventory 230 486 474 572 680
Debtors 431 741 747 903 1,076
Other Current Assets 33.0 53.4 53.4 53.4 53.4
Total Assets 1,259 1,987 2,358 2,813 3,381

ST Debt 441 623 633 690 809

Creditor 239 501 490 591 703
Other Current Liab 1.37 14.2 32.2 35.9 42.5
LT Debt 32.4 16.2 22.6 46.0 46.2
Other LT Liabilities 69.4 14.9 14.9 14.9 14.9
Shareholder’s Equity 468 809 1,158 1,427 1,758
Minority Interests 7.30 7.93 7.93 7.93 7.93
Total Cap. & Liab. 1,259 1,987 2,358 2,813 3,381

Non-Cash Wkg. Capital 453 766 752 901 1,064

Net Cash/(Debt) (274) (441) (398) (480) (550)
Debtors Turn (avg days) 84.9 99.3 98.9 90.7 91.3
Creditors Turn (avg days) 54.4 78.1 79.3 71.8 72.4
Inventory Turn (avg days) 68.3 75.6 76.8 69.4 70.0
Asset Turnover (x) 1.5 1.3 1.3 1.3 1.3
Current Ratio (x) 1.3 1.3 1.3 1.4 1.4
Quick Ratio (x) 0.9 0.8 0.9 0.9 0.9
Net Debt/Equity (X) 0.6 0.5 0.3 0.3 0.3
Net Debt/Equity ex MI (X) 0.6 0.5 0.3 0.3 0.3
Capex to Debt (%) 45.2 17.1 56.7 36.3 37.6
Z-Score (X) NA NA NA NA NA
Source: Company, AllianceDBS, DBS Bank

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Company Guide
Serba Dinamik Holdings

Cash Flow Statement (RMm)

FY Dec 2015A 2016A 2017F 2018F 2019F

Pre-Tax Profit 160 274 337 420 516

Dep. & Amort. 25.4 32.5 51.9 65.8 82.6
Tax Paid (3.0) (22.1) (14.2) (32.2) (35.9)
Assoc. & JV Inc/(loss) 0.0 0.0 0.0 0.0 0.0
Chg in Wkg.Cap. (57.2) (176) (4.3) (153) (170)
Other Operating CF 33.8 (52.9) 0.0 0.0 0.0
Net Operating CF 159 56.4 370 300 393
Capital Exp.(net) (214) (110) (371) (267) (321)
Other Invts.(net) 0.0 0.0 0.0 0.0 0.0
Invts in Assoc. & JV 0.0 0.0 0.0 0.0 0.0
Div from Assoc & JV 0.0 0.0 0.0 0.0 0.0
Other Investing CF (102) 34.1 0.0 0.0 0.0
Net Investing CF (316) (75.5) (371) (267) (321)
Div Paid 0.0 0.0 (91.4) (115) (142)
Chg in Gross Debt 240 82.0 15.7 80.6 119
Capital Issues 0.0 0.0 136 0.0 0.0
Other Financing CF (28.4) (19.2) 0.0 0.0 0.0
Net Financing CF 212 62.8 60.1 (34.5) (23.3)
Currency Adjustments 0.90 0.0 0.0 0.0 0.0
Chg in Cash 55.2 43.7 58.8 (1.3) 48.2
Opg CFPS (sen) 16.2 17.4 28.1 33.9 42.1
Free CFPS (sen) (4.1) (4.0) (0.1) 2.48 5.35
Source: Company, AllianceDBS, DBS Bank

Target Price & Ratings History

2.32 RM
12- mt h
Dat e of Closing
2.22 2 S.No. T arget Rat ing
Report Pric e
Pric e
2.12 4 1: 16 May 17 2.05 2.90 BUY
3 6 2: 22 May 17 2.16 2.90 BUY
2.02 8
1 3: 02 J un 17 2.13 2.90 BUY
1.92 7 4: 07 J un 17 2.07 2.90 BUY
5 5: 22 J un 17 1.91 2.90 BUY
1.82
6: 07 J ul 17 2.00 2.90 BUY
1.72 7: 26 J ul 17 2.00 2.90 BUY
8: 02 Aug 17 1.95 2.90 BUY
1.62

1.52

1.42
Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17

Not e : Share price and Target price are adjusted for corporate actions.

Source: AllianceDBS, DBS Bank

Analyst: Inani Rozidin

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 Company Guide
Serba Dinamik Holdings

AllianceDBS, DBS Bank recommendations are based an Absolute Total Return* Rating system, defined as follows:
STRONG BUY (>20% total return over the next 3 months, with identifiable share price catalysts within this time frame)
BUY (>15% total return over the next 12 months for small caps, >10% for large caps)
HOLD (-10% to +15% total return over the next 12 months for small caps, -10% to +10% for large caps)
FULLY VALUED (negative total return i.e. > -10% over the next 12 months)
SELL (negative total return of > -20% over the next 3 months, with identifiable catalysts within this time frame)
Share price appreciation + dividends

Completed Date: 14 Aug 2017 10:30:33 (MYT)

Dissemination Date: 14 Aug 2017 10:34:37 (MYT)

Sources for all charts and tables are AllianceDBS, DBS Bank unless otherwise specified.

GENERAL DISCLOSURE/DISCLAIMER
This report is prepared by AllianceDBS Research Sdn Bhd (''AllianceDBS''), DBS Bank Ltd. This report is solely intended for the clients of DBS Bank
Ltd, its respective connected and associated corporations and affiliates only and no part of this document may be (i) copied, photocopied or
duplicated in any form or by any means or (ii) redistributed without the prior written consent of AllianceDBS Research Sdn Bhd (''AllianceDBS''),
DBS Bank Ltd.

The research set out in this report is based on information obtained from sources believed to be reliable, but we (which collectively refers to DBS
Bank Ltd, its respective connected and associated corporations, affiliates and their respective directors, officers, employees and agents (collectively,
the “DBS Group”) have not conducted due diligence on any of the companies, verified any information or sources or taken into account any other
factors which we may consider to be relevant or appropriate in preparing the research. Accordingly, we do not make any representation or
warranty as to the accuracy, completeness or correctness of the research set out in this report. Opinions expressed are subject to change without
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Any valuations, opinions, estimates, forecasts, ratings or risk assessments herein constitutes a judgment as of the date of this report, and there can
be no assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk assessments.
The information in this document is subject to change without notice, its accuracy is not guaranteed, it may be incomplete or condensed, it may
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This publication has not been reviewed or authorized by any regulatory authority in Singapore, Hong Kong or elsewhere. There is no planned
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The valuations, opinions, estimates, forecasts, ratings or risk assessments described in this report were based upon a number of estimates and
assumptions and are inherently subject to significant uncertainties and contingencies. It can be expected that one or more of the estimates on
which the valuations, opinions, estimates, forecasts, ratings or risk assessments were based will not materialize or will vary significantly from actual
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UPON as a representation and/or warranty by the DBS Group (and/or any persons associated with the aforesaid entities), that:

(a) such valuations, opinions, estimates, forecasts, ratings or risk assessments or their underlying assumptions will be achieved, and
(b) there is any assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk
assessments stated therein.

Please contact the primary analyst for valuation methodologies and assumptions associated with the covered companies or price targets.

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 Company Guide
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Any assumptions made in this report that refers to commodities, are for the purposes of making forecasts for the company (or companies)
mentioned herein. They are not to be construed as recommendations to trade in the physical commodity or in the futures contract relating to the
commodity referred to in this report.

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offering of securities as a manager or co-manager or in any other investment banking transaction in the past twelve months and does not engage
in market-making.

ANALYST CERTIFICATION
The research analyst(s) primarily responsible for the content of this research report, in part or in whole, certifies that the views about the
companies and their securities expressed in this report accurately reflect his/her personal views. The analyst(s) also certifies that no part of his/her
compensation was, is, or will be, directly or indirectly, related to specific recommendations or views expressed in the report. The research analyst (s)
primarily responsible for the content of this research report, in part or in whole, certifies that he or his associate 1 does not serve as an officer of the
issuer or the new listing applicant (which includes in the case of a real estate investment trust, an officer of the management company of the real
estate investment trust; and in the case of any other entity, an officer or its equivalent counterparty of the entity who is responsible for the
management of the issuer or the new listing applicant) and the research analyst(s) primarily responsible for the content of this research report or
2
his associate does not have financial interests in relation to an issuer or a new listing applicant that the analyst reviews. DBS Group has
procedures in place to eliminate, avoid and manage any potential conflicts of interests that may arise in connection with the production of
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COMPANY-SPECIFIC / REGULATORY DISCLOSURES

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have a proprietary position in the securities recommended in this report as of 31 July 2017.
2. Neither DBS Bank Ltd, DBS HK nor DBSV HK market makes in equity securities of the issuer(s) or company(ies) mentioned in this Research
Report.

Compensation for investment banking services:

3. DBSVUSA does not have its own investment banking or research department, nor has it participated in any public offering of securities as a
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should contact DBSVUSA exclusively.

Disclosure of previous investment recommendation produced:

4. DBS Bank Ltd, DBS Vickers Securities (Singapore) Pte Ltd (''DBSVS''), their subsidiaries and/or other affiliates may have published other
investment recommendations in respect of the same securities / instruments recommended in this research report during the preceding 12
months. Please contact the primary analyst listed in the first page of this report to view previous investment recommendations published by
DBS Bank Ltd, DBS Vickers Securities (Singapore) Pte Ltd (''DBSVS''), their subsidiaries and/or other affiliates in the preceding 12 months.

1
An associate is defined as (i) the spouse, or any minor child (natural or adopted) or minor step-child, of the analyst; (ii) the trustee of a trust of
which the analyst, his spouse, minor child (natural or adopted) or minor step-child, is a beneficiary or discretionary object; or (iii) another person
accustomed or obliged to act in accordance with the directions or instructions of the analyst.
2
Financial interest is defined as interests that are commonly known financial interest, such as investment in the securities in respect of an issuer or
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new listing applicant notwithstanding the fact that the scheme has investments in securities in respect of an issuer or a new listing applicant.

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 Company Guide
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For any query regarding the materials herein, please contact Paul Yong (CE. No. ASE988) at equityresearch@dbs.com.

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Wong Ming Tek, Executive Director, ADBSR

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intended for institutional clients only and no other person may act upon it.

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Company Guide
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jurisdictions professional, institutional or sophisticated investors as defined in the laws and regulations of such jurisdictions.

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 Company Guide
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