Serba Dynamik - how low can it go? [MUST READ]

lipkarlock Wednesday, May 11, 2022
One of the hottest stock news this week is about Serba Dynamik.

The stock price has slumped to the low of RM0.075 already.

Fundamental (Problem) Analysis of Serba Dynamik


Due to the significant drop in profit as shown below, it is understandable that the stock price will eventually go downhill.




Technical Analysis of Serba Dynamik Share Price


Because of this, the volume of selling is so high.
You can see the spike in volume for the past few days.
Actually the selling has started since June last year 2021 already.
Well, things just become worse each day.
The oil and gas firm was the most actively traded stock across Bursa Malaysia. 


Based on all the technical trends, of course it seems to be a buying trigger.

But since we already know that the fundamental of the company is already in the red, this is a definite no-no.

Never put money in a company where the company fundamental is not solid.

Will it bounce back?

Some are speculating that there is a potential bounce back of the share price.

Well, I don't think so.

In fact, I'm expecting the stock to be delisted pretty soon.

When all the sellers has sold their shares, and no more buyers left, the chances is already pretty slim.


Why all this happen?


According to The Edge, The company slipped into Practice 17 (PN17) status in January, after its external auditor Nexia SSY PLT expressed a disclaimer of opinion over its audited financial statements for the 18-month financial period ended June 30, 2021. Subsequently, on April 13, the Securities Commission Malaysia (SC) compounded Serba Dinamik, its chief executive officer cum group managing director Datuk Dr Mohd Abdul Karim Abdullah and three other top executives RM3 million each for submitting a false statement involving a revenue of RM6.01 billion for its financial period ended Dec 31, 2020 (FY20).

Refer here for the details as well.
Basically there are disputes about the financial statement.
And then the drama comes.
Change of auditor, resignation of the leadership, legal issue etc.
Surely investors were troubled with all these issues with the company.
Hence, all the investors started to withdraw their money and dumped the shares.






What is the background of Serba Dynamik?

This is what I able to retrieve from its 2021 Annual Report from its official website:
Serba Dinamik Holdings Berhad (Serba Dinamik) was incorporated as a private limited company inMalaysia under the name of Serba Dinamik Holdings Sdn. Bhd. on 2 December
2015. It was subsequently converted into a public limited company on 13 May 2016.
Established in 1993, Serba Dinamik through its subsidiaries is an international energy services group which provides integrated engineering solutions to the oil and gas (O&G), petrochemical and power generation industries as well as water & wastewater and
utilities.

Our core businesses are Operations and Maintenance (“O&M”), Engineering,
Procurement, Construction and Commissioning (“EPCC”), Information and
Communication Technology ("ICT") and Education & Training (“E&T”). Serba Dinamik
has operational offices in Malaysia, Indonesia, United Arab Emirates, and United Kingdom.
In essence, Serba Dinamik is an investment holding company which is principally involved
in the provision of management services.

Today, Serba Dinamik has evolved from a total engineering services provider in power,
energy and broad industries to be a leader in the Industrial Revolution 4.0 (IR 4.0) via
its aggressive expansion into digitalisation, innovation and technology initiatives through
a wide array of offerings such as SMART Maintenance with Mixed Reality Solutions, D-Virtual Expo, Qwik Pay, Halal2Go and other smart applications.

Just look at how complicated the company is based on the corporate structure below. I start to have some dizziness in my head already.



This is the business model:

Besides doing engineering related work, they also involved in technology related businesses.
Here, we zoom in to the details:




What can we learn from this saga? [MUST READ]


In my opinion, it is not easy to diversify into so many type of business category.
And it is not easy to evaluate such a company as well.

In short, this is not a simple business.
Hence, it is not easy to understand.

It is better to stick to the simple guideline again: Invest in what you know.




Well, long story short, regardless of what the company is doing, at the end of the day, we are looking for a net income growth. This is not seen in Serba Dynamik.

But if there is red flag about the company, we better stay away.


Happy Investing and Stay Safe Always! 😉

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