EUR 1.14 For Business Accounts Only

SRF - Making full use of industry growth

Searefico JSC (SRF-HSX) is recognised among the top firms at both of its operating businesses being Mechanical & Engineering (M&E) and Industrial Refrigeration. The company’s growth, therefore can benefit from both the Construction and Food & Beverage Process market growth. Sustainable backlog and new contract amounts project 2016 to be a remarkable year for SRF’s M&E business. Regarding the IR business, performing overseas orders for its traditional IQF systems and exploiting new segments in the domestic IR market have demonstrated SRF’s market leading position. Beside a concentrating and stable core operating activities, SRF has a solid financial situation with sound working capital and minimum long-term debt for a construction firm.

Under FCFF and P/E valuation methods, the fair price for SRF is around VND 32,100, 20.2% upside to the closing price on August 3^rd 2016. Thus, we recommend ACCUMULATING SRF in LONG-TERM. The consistent cash dividend policy can also be a reason to consider SRF.

SRF’s major risks involve the construction demand’s seasonality. At the moment, the current construction activities in the domestic market has been growing considerably owing to the real estate market, yet might not sustain strong growth in the coming years.