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Eversendai-Will it Trail-blaze like MSM?

Eversendai, an integrated steel contractor with engineering, structural design, fabrication and erection capabilities have carved a niche in the business both locally and abroad. 

It has completed over 100 projects including Dubai's landmark hotel, Burj Al Arab, BurjKhalifa, The Dubai Mall, Dubai Airport Control Tower, Singapore Indoor Stadium, the Philippines' Mabalacat and Bamban Bridges, and Saudi Aramco in Riyadh.

Locally, it has been involved in projects as a specialist contractor for the Petronas Tower 2, Suria KLCC, Kuala Lumpur Tower, KL International Airport, KL Sentral Station, Putrajaya convention centre, new Bintulu airport, Manjung power plant, and the PKT Logistic project.

Impressive list, don’t you think?

So now, Eversendai is gearing for its maiden listing on Bursa Kl comes 1^st July. The IPO share issue in cludes 30% of the share from its founder, Datuk A.K. Nathan who will be realizing RM130 million from it. Altogether, Eversendai will raise RM270 million from this public outing.

Eversendai will also be using the proceeds to build a new plant at Trichy, India and expand  plant facilities in Rawang as well as to build  staff accommodation in the Middle East.

Datuk Nathan said that the choice of Trichy over other locations in India was made because it was easier to get skilled manpower for the plant there.

Eversendai has four plants that provided all the fabrication works for its projects that span from Malaysia to India and the Middle East.

The plants are located in Rawang, Dubai, Sharjah and Qatar.

The Rawang plant on 4.8ha is capable of churning out up to 24,000 tonnes of fabricated structured steel a year while the plants in the Middle East have the capacity of fabricating up to 96,000 tonnes of steel a year.

The new plant in India will have a 30,000-tonne-a-year fabrication capacity. 

Nathan says the company has an order book of RM1.5bil and was on the look out for more jobs in the Middle East, India and South East Asia.

 “About 94% of revenue from the RM1.5bil jobs will be realised this year and the rest by 2013,” he said.

The company targets revenue to hit the RM1bil mark this year and net profit should be about 10% to 15% of that.

Last year, Eversendai recorded revenue of RM744.9mil of which 76% was derived from its operations in the Middle East, and chalked up a net profit of RM116mil..

“We would continue to eye more jobs from our regular clients and others.

“We are a niche player in this business and we do not have many competitors (in this field).

“Our challenge going forward is to maintain the work culture and standards set but the expectations of our clients are rising and to cater to that we need to keep improving and constantly train our staff so that they are in sync with company's philosophies,'' Nathan said.

The IPO involves a public issue of 160.7 million new ordinary shares of 50 sen each which will be allocated to selected and institutional investors.

After seeing the magic spun by MSM and the woes told on the faces of UOA Development,what do you think is the fate of Eversendai? 

Some speculators say it should do okay with marginal gains while the naysayers said it may be cannibalised by Bumu Armada is that comes too soon on the tail of Eversendai.

For now, it looks like a fair buy.

Return of Bumi Armada. Will It float Again?

Malaysian oil and gas services provider Bumi Armada, set to return to Bursa KL, has apparently being given a potential IPO price of somewhere between RM2.80 to RM3.15 per share for its public offering slated in July 2011.

If so,it means that the exercise will amassed some US$906 million (RM2.7 billion) from the capital market.

So what is so unique about this Bumi Armada ?

It is an offshore support oil and gas specialist and the only Malaysian company that owns floating production storage and offloading (FPSO) vessels, which carry a premium lease rate.

Bumi Armada was privatised in 2003 by tycoon T. Ananda Krishnan, and a planned relisting in 2008 was delayed due to the global financial crisis.

CIMB is the joint global co-ordinator and bookrunner for the offering.

So, is this a good bet or will it sink like UOA? Or worse xerorised like XOX?

As there are no better offering for the year, perhaps a risk on this stock may make your day.