Phillip Capital Research said it continues to like Dayang for its prominent position as a market leader in the offshore HUC/MCM segment.
PETALING JAYA: The combined contract value for Dayang Enterprise Holdings Bhd
’s recent contact extensions for three accommodation workboats (AWBs) from PETRONAS Carigali Sdn Bhd could be about RM60mil, says Phillip Capital Research.
The revised daily charter rate (DCR) is within the range of RM68,000 to RM72,000 per day, representing about 5% to 10% higher compared to the initial contract.
Phillip Capital Research believes the higher revised rate is a positive sign that the offshore support vessel (OSV) market remains strong with the current DCR already above the 2018 rates.
While no contract value was disclosed on a call-out basis, the research house gathered that the extension value for each vessel is worth about RM20mil, taking the combined estimated contract value to RM60mil.
The research house expects that these AWBs will be mobilised for hook-up and commissioning (HUC) and maintenance, construction and modification (MCM) works.
It also made no changes to its earnings forecast having already input this in its existing forecasts.
It maintains its “buy’’ call rating for the stock with a target price of RM2.30 a share, pegged to an unchanged 13 times price earnings ratio on 2024 earnings per share.
Dayang is scheduled to release its fourth-quarter financial year 2023 results on Feb 22.
It said it continues to like Dayang for its prominent position as a market leader in the offshore HUC/MCM segment.
The segment is poised to benefit from the expected increase in activity levels as clients capitalise on the current high global oil prices.
The risks to its call include lower-than-expected work orders, higher operating costs and sharp decline in global oil prices.
The AWBs secured contract extensions for Dayang Zamrud, Dayang Pertama and Dayang Berlian for a duration of 279 to 296 days.
