Investing

Why I bought into Eversendai?

I have been in the construction industry for more than 50 years and I have been the Secretary General of the Master Builders Association Malaysia for 9 years. I am very proud to say that all our members are the builders of all the properties in every town and city in Malaysia. In the last 50 years, all our members have been improving their skill. As a result, buildings are taller, bridges are longer and beautiful structures are getting more complicated.

In my opinion, among all our members Eversendai Corporation Bhd has improved the most.

It is one of the most sought after turnkey contractors in the world; delivering highly complex projects with innovative construction methodologies for steel structures, power and petrochemical plants as well as composite and reinforced building structures in the Asian and Middle Eastern regions. With a workforce of almost 15,000 personnel, Eversendai has served clients in over 14 countries such as Malaysia, Singapore, Thailand, Philippines, Indonesia, Hong Kong, India, Oman, Saudi Arabia, Bahrain, Qatar, United Arab Emirates, Azerbaijan and Iraq, and constructed some of the world’s most famous landmark structures. More information on Eversendai Corporation Berhad is available at www.eversendai.com.

Last year, it invested in the oil and gas company in Singapore and lost more than Rm 100 million which has been taken into account in its 2016 audited account. Due to this loss, its share price plunged. It turned around and reported profit in its 1st quarter ending 31 March 2017 with the following press release:

PRESS RELEASE: Kuala Lumpur, May 25 2017, Eversendai breaks through with profits in Q1 2017 – Eversendai Corporation Berhad (the ‘Group’), revealed a turn to profit, for the 1st quarter of 2017 ended 31st March 2017. Today, the Group announced a revenue of RM395.96 million and a pre-tax profit of RM18.71 million for the said period bringing the renowned engineering and construction specialist’s books out of the red and into the black. Eversendai Corporation Berhad’s Executive Chairman and Group Managing Director, Tan Sri A K Nathan said “I am glad to announce that Eversendai is back on its profitability track gearing towards progressive profits here on.” The Group showed an increase of 107% in profit-margin from pre-tax loss of RM267.21 million as of 31st December 2016 to a profit of RM18.71 million as of 31st March 2017. “The value of projects we have secured to-date has also increased in comparison to the same period in 2016. This year from 1st January to 31st March, we secured a total of RM801.4 million worth of projects,” he further said. The Group announced recently that it had won additional projects worth RM557.6 million from 1st April to-date bringing the total value of projects secured in 2017 to-date to RM1.36 billion. This brings their order book to an excess of RM3.2 billion to-date. Overall the Group performed well, showcasing a healthy growth in terms of profitability this quarter in comparison to the same period in 2016. “The internal restructuring and re-strategising in 2016 is now showing its yield in our profit margin,” Tan Sri A K Nathan said. “We are confident this will continue to grow as we step into new markets, both in terms of operating regions and new services.”

Tan Sri Nathan will be giving his talk on 30 July 2017 at 10 am in The Star Building KL. Entrance is free of charge.

How to be a super investor?

Remember investors must look ahead at the future profit growth prospect which is the most powerful catalyst for moving share price. You must buy before the announcement when the price is still cheap. Clever investors do not wait to see the good profit announcement because its share price would have gone up and regret for not buying earlier.

You can see from the company announcement that I have been buying and my last purchase was 1,683,500 shares on 19 July 2017. I have a total of 64,272, 200 shares, making me the 2nd largest shareholder of the company.

I am obliged to tell you that I am not asking you to buy to support the share price and make me richer. But if you decide to buy, you are doing it at your own risk.

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