DBS Vickers Securities (DBSVS) had a positive view on the new project acquisition of Sriracha Construction Public Company Limited (SRICHA), especially the 828 million baht worth of project from Thai Oil Public Company Limited (TOP) to support its revenue and profit in 2021.
Early March. SRICHA’s executive stated that the company has 1.8 billion baht of backlog and expects to acquire two more projects worth 1.3 billion baht early this year. Meanwhile, the company recorded a revenue of 1,651 million baht and a profit of 142 million baht in 2020, a great recovery from a 3-year deficit. SRICHA’s trailing P/E and P/BV are 33.8x and 2.9x. The financial status is considerably good with a D/E of 0.3x.
Last year, the company offered a Bt0.40 per share dividend payment, equivalent to 2.5% dividend yield, which DBSVS rated as a good payment and expected that the could be speculative buy on SRICHA over the new project acquisitions.
Yesterday, SRICHA announced that the subsidiary company “SCC Maintenance Services Company Limited” received additional work in fabrication and erection of structural steel and painting for piping which made the project value increase from initial value of 1,090,000 baht to around 1,424 million baht.
The fire water and metal sheet work will also be granted at the value around 94 million baht under the same project. Since this project is very complicated and needs a more specialized team with great experiences to accomplish the work.
SRICHA stated that the company will operate the subcontract and work on a back to back basis with the subsidiary company. The project will end around July 2021.
Furthermore, the company also granted the work project from joint venture of PETROFAC-SAMSUNG-SAIPEM to do the structural steel, equipment and piping erection and insulation work for TOP with initial project value around 828 million baht.
SRICHA closed the morning session on March 26, 2021 at ฿16.20/share, increased ฿0.20/share or 1.25% with a trading value of 16 million baht.