ANALYSTS in general have hailed the move by Serba Dinamik Holdings Bhd to hire Ernst & Young Advisory Services Sdn Bhd (EY) as an independent reviewer to assess the veracity and accuracy of the matters highlighted by the former’s external auditors KPMG for its provides some assurances to the market.
“We believe this is a positive step forward for Serba Dinamik as it displays confidence to shareholders,” opined Hong Leong Investment Bank (HLIB) Research analyst Low Jin Wu.
“We believe that the appointment of EY as an independent reviewer is a positive step for Serba Dinamik due to its credibility as one of the Big-Four accounting firms.”
Apart from agreeing to hire EY, Serba Dinamik has also announced the appointment of Datuk Mohamed Ilyas Pakeer Mohamed, Masleena Zaid and Johan Mohamed Ishak to its board as independent and non-executive directors (INEDs).
With share price of the global integrated oil & gas (O&G) service provider having fallen and slightly breaking below its target price, HLIB Research has upgraded its rating on Serba Dinamik to “hold” (from “sell” previously) with an unchanged target price of 78 sen based on 0.7 times FY2022 book value per share (BVPS).
In particular, the research house also made special mention on the appointment of Masleena Zaid who is the managing partner of Messrs Masleena, Yee & Partners as a positive step given she was previously a prosecuting officer at the Securities Commission (February 2001 to June 2008) and the head of section at the Companies Commission of Malaysia (July 2008 to December 2009).
“We read this move as a signal that Serba Dinamik is committed to prove that the company is free from any wrongdoing,” justified HLIB Research.
While Serba has shown some positive moves to clear its name, the research house reckoned that the independent audit will take at least three months to complete, hence investors might not be ready to jump the gun completely just yet.
“However, the recent step taken by Serba Dinamik shows a display of confidence to shareholders,” HLIB Research pointed out.
“Until the accuracy and veracity of the accounting matters are resolved, we believe that volatility will ensue.”
At 10am, Serba was down 5.5 sen or 7.38% to 69 sen with 238.26 million shares traded, thus valuing the company at RM2.57 bil. – June 15, 2021