Highlights

Dayang Enterprise Holdings - Slaying It

Date: 04/09/2019

Source  :  HLG
Stock  :  DAYANG       Price Target  :  1.65      |      Price Call  :  BUY
        Last Price  :  1.96      |      Upside/Downside  :  -0.31 (15.82%)
 


Dayang secured a new 15 months contract from Petronas Carigali for the provision of Hook-up, Commissioning and Topside Major Maintenance Services. We estimate this contract is worth c.RM100m-RM300m, bringing its YTD sum to RM600m-RM800m (or 75%-100% of our replenishment assumptions). For conservative purposes and given that this award is a call out contract, we keep our earnings forecast unchanged. Maintain BUY with ex rights TP of RM1.65.

NEWSBREAK

Dayang has been awarded a new contract by Petronas Carigali for the provision of Hook-up, Commissioning and Topside Major Maintenance Services. The duration of the contract is for 15 months effective from 16th August 2019 and expires on 15th November 2020. We understand that the contract is a call-out contract and the total value ranges between RM100m-RM300m over its duration.

HLIB’s VIEW

This award will lift its YTD win to c.RM600m-RM800m, accounting for 75% -100% of our orderbook replenishment estimates in FY19. Recall that Dayang had earlier announced two contracts wins this year, (i) 5+1 year Pan Malaysia-Maintenance, Construction and Modification (PM-MCM) contract from SEA Hibiscus Sdn Bhd and (ii) 4+1 year Procurement, Construction, Installation, Hook-up and Commissioning Services contract from Roc Oil. We estimate that these 2 contracts are cumulatively worth RM500m. We reckon that Dayang may be able to secure more than what we have assumed, banking on the I-HUC package by Petronas.

We reiterate that we are not overly concerned by the news of I-HUC contract cancellation as Dayang would still be able to receive work orders from Petronas via an extension or additional farm-in contracts which has manifest in this award. Furthermore, we understand that Dayang’s 60.5% owned Perdana (Not-Rated) is eyeing to achieve average utilisation >80% in 2H19 (vs 57% in 1H19). With that, Perdana stands a good chance to breakeven in 2H19.

Forecasts. Unchanged as the award is within expectations.

Maintain BUY and ex-rights TP: RM1.65. Maintain our SOP based TP of RM1.65 on an ex-rights basis (RM1.73 on cum rights basis). The on-going restructuring plan will allow Perdana’s net gearing to improve significantly to 0.15x (from 1.3x) while Dayang’s net gearing to improve marginally to 0.61x (from 0.77x). This eliminates investors’ concerns over Perdana’s going concern issue amidst strengthening its balance sheet. Maintain BUY on the stock with the expectations of strong earnings delivery backed by robust work flow.

Source: Hong Leong Investment Bank Research - 4 Sept 2019

Share this
Labels: DAYANG

Related Stocks

Chart Stock Name Last Change Volume 
DAYANG 1.96 +0.09 (4.81%) 5,825,800 

  Be the first to like this.
 


 

284  239  519  1261 

ActiveGainersLosers
Top 10 Active Counters
 NameLastChange 
 ALAM 0.125+0.025 
 ARMADA 0.54+0.01 
 FINTEC 0.095+0.015 
 TRIVE 0.015+0.005 
 EKOVEST 0.805+0.025 
 HSI-H8F 0.275+0.025 
 FINTEC-PA 0.0350.00 
 ALAM-WA 0.06+0.01 
 MTAG 0.595+0.025 
 HSI-C7F 0.235-0.035 

TOP ARTICLES

1. Dayang: Points to ponder & can you advise me? Koon Yew Yin Koon Yew Yin's Blog
2. (Icon) Why You Should Learn To Invest In Overseas Stocks Icon8888 Gossips About Stocks
3. Formosa Prosonic Industries - Divesting the Last Australian Project - Solid Net Cash, Strong DY and Attractive Valuations HLBank Research Highlights
4. Challenging Times for Retirees with Ultra-Low Interest Rates. BFM Podcast
5. Jaks Resources Bhd: A relook into Jaks Resources from Profitability, Volume Spread Analysis and what’s Insiders Report are telling they are doing Now? TradeVSA - Case Study
6. [12Invest] 我要投资 - 浅谈以Reverse Takeover 上市的Widad Group(0162) [12Invest] - 我要投资
7. Malaysia Stock Analysis Report – RCECAP (9296) Louis Yap Investment
8. [转贴] [Facebook live video:浅谈Seacera group bhd (Seacera)] - James的股票投资James Share Investing James的股票投资James Share Investing
Partners & Brokers