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RM2.70 Stock Selling For RM1.70
5 investment banks have a buy call, all valued Serba above RM2, if Dato Awang is throwing it at RM1.60 to RM1.70, what are you waiting for?

Upside Bigger Than Downside
Other than glove counter, have you seen such a complete list of 'green' price target? Serba Dinamik is a hidden gem. It's priced is so low because one of the director is disposing it, it is a matter of time the price will fly. The upside is bigger than the downside, what have you got to lose? All you need is time.

Serba latest QR - profitable even under lockdown / MCO.

But First, The Why?

Serba Dinamik is a 40% O&G + 50% Construction + 10% IT company. Unfortunately, when compared to her peers, Serba Dinamik failed to recover meaningfully, this is not because the company is badly managed, in fact, it is the opposite.

The reason is because one of the directors was actively disposing his shares, no reason was given but rumours has it that he is probably selling to invest in other smaller companies, this was proven to be true when theStar reported this - Serba Dinamik's Awang Daud takes up nearly 27% stake in i-Stone. iStone is one of the 4 companies he has been actively buying up, the other 3 are Minetech Resources, Ocean Vantage and Sealink International. Here are his stacks in the various companies:

  • MINETEC - 23.99% direct Interest, Worth RM82 million
  • SEALINK - 19.65% direct Interest, Worth RM19 million
  • OVH - 6.65% direct Interest, Worth RM17 million
  • ISTONE - 26.98% direct Interest, Worth RM95 million
  • SERBADK - 2.51%, Worth RM146 million

For your information, Dato Awang Daud has been selling his Serba's stock for quite sometime now, he probably needs the money to invest and gain control of other smaller companies. Couple with the low oil price, this probbaly explains why the share price of Serba was not able to move up. 

Now that he is done selling, hopefully, which we believe he has, it is a matter of time the stock price will move up. Unless he has another new company to invest, then again, he has only RM146 million worth of stock in Serba, give or take, it will take him a few more months to fully dispose all of it, if he choose so.

You Shall Not Pass!

When will this end? Nobody knows, it doesn't matter, right? If a person is selling something worth RM2.70 for RM1.70, what is there to complain? All you need is some time and patience. And when he is done selling, the price will spike - release the kraken as they say. Invest and hold. Dato Awang current has 80+ millions no of shares, if he continues disposing, it will take another month or two. A 50% upside is worth the wait, dont you agree?

How Was Serba's Performance?

One word - good. Almost every Investment Banks continue to like SERBADK given its superb record of earnings growth delivery, and for also having one of the best ROEs within the sector.

Profits And More Profits And Many More
Charts and numbers don't lie. They've consistantly perform better every year, even during this covid lockdown. Recently they've bagged another big project in Abu Dahbi, when you invest in Serba Dinamik, you invest in the founder - Dato Abdul Karim and his team. One thing about him is he has very good connections with all the VIPs in the industry, which explains why he was able to win projects after projects all over the world.

Serba vs Maybank, Public Bank, Genting and Etc.
Have you ever wonder why Maybank, Public Bank, Genting, PPB, and many more big companies have a declining stock price? Sure, they give good dividends but if in the long run you are losing market value holding their stock, it is back to square one. The reason is they have stagnant profit and earnings, which is reflected in their stock price gradually.

In the short term, stocks can go anywhere. In the long term, earnings will decide if the share price goes up or down. Serba is a company that reports growing profit and earnings, and we believe it will continue to do so in the forseable future.

JP Morgan USD190 oil prediction is crazy, but oil price will eventually go up, how high? Nobody knows. The reason is simple, when oil prices crashed during the lockdown, many oil companies went brankrupt and those that survived cut down on capex and exploration.

What will happen when demand is back? Which we all know it will eventually. People will start to fly again, and drive more instead of taking the public transport to avoid any viruses. It will take time to ramp up production and this will cause oil prices to spike. We think USD190 is too high, but with so much stimuluous thrown by every government in the world, there is no way of saying these money won't end up in the commodities market like 2009.

Oil Recovery + Forward Looking Company
Serba Dinamik's book order exposure to oil and gas is approximately 40%, 10% is IT and the remaining construction. This means they are not highly exposed to oil and gas prices but for some unknown reason they are categorized as an O&G company. In fact, during this lockdown, they are able to secure many more new EPCC (Engineering, Procurement, Construction and Commissioning) projects. Go google them.

When To Invest? 50% + 50% Upside?
Don't wait. Invest now, just buy and hold. You'll never have this opportunity again. A 50% upside according to Kenanga and very little downside, what have you got to lose? Just Google Serba Dinamik and check out for yourself, do you see positive news or negative? Buy and hold for long term.

Think about it, oil prices have yet to rally, and eventually it will, just a matter of time. What will the price for this stock be? 50% now + 50% oil recovery and vaccine? You'll unlikely to find another stock that have this potential. Good luck and happy investing. Summary:

  • Serba is a profitable growing company.
  • Serba's founder has good relationship with many VVIP, constantly getting new projects.
  • The stock price is low not because of bad fundamentals.
  • The upside is bigger than the downside since it did not rally much.
  • The upside will be even bigger if oil recovers + a vaccine is available.
  • No other stock offer such opportunity - minimal downside with plenty of upside

For those in doubt, ask yourself, which sector is now at rock bottom price? Property, Construction, and O&G stocks. Healthcare has a crazy rally, Technology somewhat crazy, Banks are doing so so, Plantation is so so as well. Invest in what is down now, not what is crazy now. 


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