*Sealink Group - The rising star *
*Share price: 64sen*
*Market cap: RM323m*
*Its profile?* An Integrated Service Provider, which builds, owns and operates a diverse fleet of offshore marine support vessels, serving mainly the global offshore O&G exploration and production industry. The majority of its products and services are derived overseas.
*The emergence of Star.* Serba Dinamik Holdings Bhd co-founder Datuk Awang Daud Awang Putera emerged as a major shareholder in loss-making Sealink International Bhd.
*Orderbook.* Minority shareholders holding their breath in anticipation of what Awang Daud will do next. It could be another proxy to Serba Dinamik to secure big jobs. Mirroring the emergence of Serba Dinamik founder, Dato Karim as the single largest shareholder in SCIB and Kpower, which has transformed both companies’ prospects in securing additional RM1.5 jobs target. *We could expect Sealink to secure probably the same RM1.5b jobs target more or less.*
Assuming Sealink is able to secure additional RM1.2b jobs (20% discount based on the rule of thumb) and recognition of 30%, they could achieve FY20 revenue of about RM360m. With a 10-12% PAT margins estimate, the company could achieve earnings turnaround in FY20 with RM36m-RM43m profit, which would translate EPS of 7.2sen-8.6sen.
*By pegging those FY20 EPS to conservative 11x PER, it would imply the hypothetical fair value of 79sen-95sen.* Market rumour says that Sealink will rally to RM1.20 target - similar to Kpower and SCIB. At RM1.20, it would imply forward PER FY20 of 13.9x - 16.7x only!
*Gearing*. Current net gearing is still at a low 0.3x as of 3QFY19 and still has room for bank borrowings to fund their jobs.
*Stamp duty exemption.* The stamp duty exemption will be applicable for trading of Sealink for eligibility in 2020. The more investors trade Sealink, the more they save and the more maximum capital gain they can achieve! The list of eligible stocks is here: https://www.bursamalaysia.com/sites/5d809dcf39fba22790cad230/assets/5e1598515b711a666348f0e8/Mid_Small_Cap_PLCs__Mkt_cap_of_200_mil_to_2_bil__Dec2019_V3.0.pdf
_Disclaimer: This is information and hypothesis only based on current news. NOT investment advice. Do your own due diligence and trade at your own risk._
https://klse.i3investor.com/blogs/trendtrading2030/2020-01-23-story-h1482899531-THIS_STOCK_RALLIED_300_LAST_YEAR_THIS_YEAR_COULD_BE_ANOTHER_170_AND_MAY.jsp
