Dayang poised for further contract wins for the year
KUALA LUMPUR: Dayang Enterprise Holdings Bhd (Dayang) is poised for further contract wins for the year, analysts project.
According to the research arm of Kenanga Investment Bank Bhd (Kenanga Research), Dayang has for the year to date (YTD), secured three Pan-Malaysia Maintenance, Construction and Modification (PM-MCM) contracts, totalling to a guesstimated figure of circa RM1 billion.
“Moving forward, we believe Dayang is poised for further contract wins as the slew of maintenance contracts awarded back in 2013 are due for renewals,” Kenanga Research said.
The research arm’s current orderbook replenishment assumption of RM1.5 billion for financial year 2018 (FY18) imputes roughly an additional two contract wins for the remainder of this year.
The research arm of MIDF Amanah Investment Bank Bhd (MIDF Research) saw that the company was currently participating in bids worth about RM600 million – both locally and overseas.
MIDF Research further noted that the company remains fairly confident of winning a portion given its track record and successful campaigns in similar projects.
The research arm said that Dayang is no stranger to Petroliam Nasional Bhd’s (Petronas) maintenance, construction and modification (MCM) works as the group was the incumbent for the previous hook-up commissioning (HUC) contracts from 2013.
“Currently Dayang on its own has six work vessels and two supply boats with an average age of approximately 6.5 years old.
“All of which are fit for purpose, within the stringent specifications required by Petronas and its production sharing contractors.”
As such, MIDF Research reiterated its‘ buy’ recommendation on Dayang with a rolled forward revised target price of RM1.30 per share.
The research arm’s ‘buy’ recommendation was premised on large potential share upside, earnings up-cycle in FY18, improving operating climate with higher activity levels and improving utilisation rates (UR) and improving conditions for Perdana Petroleum Bhd (Perdana Petroleum).