Seacera Group Berhad (Seacera - 7073) is formerly known for it's tile manufacturing and distribution. Aside from the tiles division, Seacera also had a construction outfit as well as a property division. While Seacera had not been under the investor radar previously due to the lack of catalyst and growth, the emergence of Encik Zulkarnin Bin Arrifin as the Group Managing Director in Seacera in the year of 2011 had brought a new sense of life into the group future direction and expansion.
Encik Zulkarnin had spent a well 3 to 4 years in streamlining the group operation as well as identifying new areas of opportunity for the next phase of expansion for Seacera. Under Encik Zulkarnin, he will be looking to build strong recurring revenue in Seacera in order to see sustainability of growth and expansion. With Seacera leaping into 2016 under the solid leadership of Encik Zulkarnin, the most interesting event will be seeing Encik Zulkarnin unveiling it's ace cards in Seacera in the year of 2016.
Seacera had saw active participation recently with strong rising interest shown in the daily traded volumes. Technical reading had shown strong bullish uptrend with 23rd December trading putting a strong bullish note with white candle closing above the uptrend line with supported volumes, signalling stronger uptrend in the coming days. Seacera had also broken it's psychological resistance of RM 1.00. A strong run ahead will see Seacera putting a notch at RM 1.20 easily.
While traders will prefer a position after retrace and consolidation, Seacera's fresh momentum is not to be doubted should there be any material development that will see Seacera hammering forward without a stop. According to technical reading, Seacera will be poised to hit RM 1.50 in a mid term basis.
When Security means Fencing Up with Seacera
One of the biggest proposal that Seacera had put forward with the government of Malaysia will be the billion valued project for a 506km electric security fencing along the Malaysia-Thai border. The proposal which had been mentioned in 2013 by the Home Minister Dato' Seri Ahmad Zahid had saw urgency as smuggling and human trafficking took the headlines as investigator uncovered trafficking dens.
According to The Star, it had been reported that the government is losing more than RM 7 billion from smuggling activities which includes rice, petrol, diesel, alcoholic beverages, cigarettes, fertilizer, firearms as well as imitation goods. This had to be addressed urgently because as times goes by, the government will continue to lose out even more. Analyst expect the government to lose out around RM 100 billion in the coming 10 years from borders smuggling activities.
Seacera, being 1 of the pioneer in the project proposal submission is teaming up with Intelligent Fence's expertise to deliver the project. There are 3 others companies that had submitted their proposal as well. While the gross value of the project is not yet determined, the stretch of 506 km is looking to range around RM 3 to RM 3.5 billion with a maintenance concession of around RM 300 million a year.
According to closed link sources which is familiar to the matter, Seacera is amongst 1 of the shortlisted candidate for the electric security fencing project. However, familiar sources are looking to see the whole 506km electric security fencing project to be split into at least 2 portion. Notwithstanding to that, Seacera will be seen as the core delivery partner in the electric security fencing project.
The electric security fencing project will resemble as one of the core re-rating factor for Seacera, from 1 off construction revenue and recurring revenue from concession agreement. Assuming the Seacera packages worth RM 1.5 billion for a span of 3 years at 15% profit margin, and concession agreement in maintenance worth RM 150 million a year subsequently after completion, this will be seeing Seacera netting in a EPS of 39 cents for 3 years from the construction of the fence. [(1.5 bil x 15%) / 2 years] / 189.6m shares. However, since the electric fence will see high capex, Seacera current outstanding share might be seeing dilution effect from exercise of warrant as well as future private placement exercise.
Seacera Going Niche in Healthcare Sector
Beside the ambitious electric security fencing project, Seacera is tipped off to see a diversification into the healthcare sector in Malaysia. The healthcare industry in Malaysia had been picking up in a face pace with the increased of older generation and advancement of medicine.
According to close sources which are familiar in this, Seacera will be focusing on a niche specialized medical equipment. This diversification will see Seacera as a stepping stone to tap into the RM 10 billion healthcare industry in Malaysia.
Conclusion
Seacera will be 1 of the black horse come Year 2016. Under the strategic leadership of En Zulkarnin as the Group Managing Director, it is believe that Seacera will see greater heights in the coming days.
Seacera will be an interesting company to be invested into based on
- Prime Shortlisted candidate in delivering the electric security fencing project in Malaysia-Thai border worth more than RM 1billion with recurring concession rights to provide steady stream of recurring revenue.
- Seacera diversification into niche market of healthcare industry which is resilient against economy downturn
- Seacera is current trading at 40% from it's NTA of RM 2.72
- Solid management team under En Zulkarnin bring huge transformation into Seacera in present and future
Fence up with Seacera? You decide
Bone's short term TP : RM 1.20
Mid Term TP : RM 1.50
Cheers and have a nice day
Regards,
Bone
SEACERA (7073) - December Focus on Seacera - Gold Fences
http://bonescythe.blogspot.my/2015/12/december-focus-on-seacera-gold-fences.html
