Analysts anticipate expansion in project margins due to better contract terms secured.
PETALING JAYA: Oil and gas-related company Dayang Enterprise Holdings Bhd
is liked by analysts due to its sustained ramp-up in upstream maintenance activities as well as the anticipated expansion in project margins due to better contract terms secured.
Kenanga Research also said in a report that other positives include its net cash balance sheet allowing for more potential expansions and its marine division which is set to benefit from the boom in the offshore support up-cycle.
Dayang last week week secured two contracts for the provision of accommodation workboats from Hibiscus Petroleum Bhd.
The company said DESB Marine Services Sdn Bhd, a wholly owned unit of Dayang, was awarded the two contracts by Hibiscus’ subsidiaries namely, Hibiscus Oil & Gas Malaysia Ltd (HML) and SEA Hibiscus Sdn Bhd.
According to Bursa Malaysia filings, the contract with HML is for a duration of 30 days, with two extension options of up to 30 days each while the other contract with SEA Hibiscus will be for 110 days, with the same extension options.
“We estimate the secured charters could be priced at a conservative daily charter rate (DCR) of RM80,000, similar to the three charters Dayang secured on March 24.
“This is consistent with our existing assumptions of 82% vessel utilisation and average DCR of RM81,000 for accomodation workboats of the whole fleet hence we deem the win within our expectations.
“This brings the total win of the group to a total of four accommodation workboats since the start of 2025, an encouraging indication of the robust demand for maintenance vessels despite headwinds from the Petroliam Nasional Bhd-PETROS debacle,” Kenanga Research said.
The research house said it was maintaining its target price of RM3.39 pegged to an unchanged 13 times financial year ended Dec 31, 2025 (FY25) price earnings (PE) ratio, which is at a one time multiple premium to the average forward PE of 12 times of its peers.
Dayang’s stock price was at RM1.97 at last look.
Kenanga Research told clients risks to its call include significant decline in Brent crude prices, unexpected vessel downtime due to unplanned maintenance, and a decline in oil producers’ capital expenditure.
Dayang reported an 82.1% decline in its net profit for the fourth quarter ended Dec 31, 2024, caused by foreign exchange loss and the absence of a reversal of impairment loss.
Net profit for that period fell to RM16.81mil from RM93.79mil a year earlier. A final dividend of seven sen per share was declared, to be paid on March 17.
