Finally SCIB's free warrants ex-date & exercise price have been announced. Shareholders have been waiting for it until sore neck.
The exercise price is fixed at RM1.77 per warrant which is higher than latest mother share's closing price of RM1.70, and it will be ex-ed on 2nd Feb 2021.
The reason I haven't sold any of my SCIB shares yet is because of this free warrants, it's quite a "generous" offer of 1 free warrant for every 2 SCIB shares.
Now the bonus shares and warrants are done, how about the future of this company?
In year 2020, it secured a whopping RM1.84 billion worth of new contracts, which exceeded management guided figure of RM1.5bil.
18/8/20 RM55.6mil (USD13.2mil): Oct20 - Apr21 (Indon)
18/8/20 RM607.8mil (USD145mil): Oct20 - Sep24 (UAE)
18/8/20 RM43.9mil: Oct20 - May21 (Mas)
3/12/20 RM18.3mil: Oct20 - Mac22 (Mas)
3/12/20 RM252.8 mil (USD62mil): Dec20 - Nov21 (Qatar)
Total contracts won in 2019: RM175.4mil
Total contracts won in 2020: RM1,843mil
If we study these contracts carefully, we'll notice that year 2021 will be the year most contract values will be recognized, and it does not even include future contracts to be secured in 2021.
Its largest contract is the RM864.5mil Oman & Qatar contract which runs for only one year from Apr20 to Apr21 if there is no delay by the pandemic.
However, we know that they have been delayed.
For the first 6 months when the first contract started (from Oct19 to Mac20), SCIB only recognized RM44mil of construction revenue.
For the subsequent 6 months from Apr20 to Sep20 when the huge RM864.5mil Oman & Qatar contract started to kick in, it has just recognized RM246mil of overall construction revenue.
Depending on how long the contracts are delayed, I think that its construction revenue will continue its increasing trend from FY20Q4 all the way to FY21Q2.
After that it might depend on how many new contracts it can secure in the first half of year 2021.
I have never attended any AGM/EGM before, and my first experience was the virtual EGM of SCIB in Nov20. I registered, viewed and voted online through Tricor and it was very simple.
I was surprised to be given an RM50 touch n go reload voucher after that.
As I was working at the time of EGM, I was interrupted and did not listen thoroughly to the EGM.
The important take home messages I received from that EGM were those Datuk Abdul Karim always mentioned in his interviews such as sustainability, industrial 4.0 with 3D printing and the most important one, SCIB will end year 2021 with at least RM2.5bil unbilled contracts on hands.
So far SCIB under Datuk Abdul Karim has won a total of RM2 billion contracts, and only one significant contract (RM607.8mil from UAE) runs beyond year 2021.
I predict that it will end year 2020 with around RM1.4bil worth of unbilled contracts, and another ~RM1bil will be recognized in 2021.
So, if it were to fulfill its prediction of RM2.5bil unbilled contract value in the end of 2021, SCIB has to win another RM2 billion new contracts this year.
If this is true, then it will be another exciting year for SCIB despite a slow construction sector recovery.
All these are just my own opinion and estimation. Readers are advised to study the company themselves to decide whether they should buy or sell its shares.
http://bursadummy.blogspot.com/2021/01/scib-updates-free-warrants-on-way.html
