‘BUY’ RATING ON DAYANG ENTERPRISE

HLIB Research sees more job orders, improved vessel utilisation rate

DAYANG Enterprise Holdings Bhd’s financial year 2022 performance is expected to improve over the next few quarters, backed by increased job orders due to fewer Covid19-related restrictions and expenses, and an improved projected blended vessel utilisation rate for its 63.7 per cent-owned Perdana Petroleum Bhd.

Hong Leong Investment Bank Bhd (HLIB Research) said the uptrend was also backed by Petroliam Nasional Bhd’s (Petronas) activity outlook 2022-2024, which indicated a significant 35 per cent improvement in hook-up and commissioning (HUC) and maintenance, construction and modification (MCM) man-hours this year.

“We highlight that Dayang Enterprise will focus on turning around Perdana Petroleum, which is the company’s marine charter business, in its financial year 2022. We view this as a positive strategy,” it said.

Dayang Enterprise’s net profit of RM13.8 million for the first quarter ending March 31 exceeded HLIB Research’s expectations and was within its and consensus full-year net profit projections of 25 and 22 per cent, respectively. “The key variance against our forecast was betterthan-expected work orders from Dayang Enterprise’s topside maintenance segment in the first quarter.”

The research firm has raised its financial years 2022 and 2023 earnings forecasts on Dayang Enterprise by 10 and one per cent, respectively.

This was to account for increased job win assumption from its i-HUC and MCM divisions and a higher blended vessel utilisation rate assumption for its offshore marine services division, it said.

“We have upgraded the stock to ‘buy’ with a higher target price of RM1.04 from 89 sen previously,” it added.

The key variance against our forecast was better-thanexpected work orders from Dayang Enterprise’s topside maintenance segment in the first quarter. HONG LEONG INVESTMENT BANK BHD