Quick take: Dayang shares up 3.8% on Q1 turnaround

  • Stock on the Move
  • Wednesday, 24 Jun 2020

KUALA LUMPUR: Shares of Dayang Enterprise Holdings Bhd rose 4% in early trade Wednesday after bouncing back into profitability in the first quarter ended March 31.

The oil and gas contractor added 3.88%, or five sen to RM1.34, the highest in two weeks, with 12.1 million shares traded. It is currently trading at a PE ratio of 5.41 times.

Dayang posted a net profit of RM9.33mil for the first quarter ended March 31, against a loss of RM4.14mil reported in the same quarter of the previous year mainly due to higher work orders received as well as higher vessel utilisation.

Revenue for the period rose by 10% to RM172.06mil from RM156.41mil previously.

Vessel utilisation rate in the current quarter is 55% as compared to 76% in the fourth quarter of 2019.

The company had a strong start to 2020 despite the seasonally weak quarter which is typically affected by monsoon weather.

Kenanga Research said Dayang’s 1QFY20 came in below expectations, despite strong results.

“Despite the strong 1QFY20 core net profit of RM13.6mil (adjusted for unrealised forex losses), turning around from losses last year, we deem the set of results to be below expectations, coming in at merely 6% each of our and consensus full-year forecasts, as we see downside risks in earnings assumptions given current challenging landscape,” it said.

Kenanga is anticipating a weak 2QFY20 on the back of MCO-led disruptions, while overall trend in capex and opex cuts from clients could also translate to less work orders for the remainder of the year.

It has upgraded Dayang to “market perform” with an unchanged target price of RM1.30.

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