Phillip Capital Research remains positive on the company’s earnings prospects.
PETALING JAYA: Dayang Enterprise Holdings Bhd
is undertaking a vessel renewal programme as it aims to enhance operational reliability, reduce maintenance and operating costs.
With an average fleet age of 15 years, Phillip Capital Research in its latest report said Dayang is embarking on a fleet renewal programme to improve efficiency and support long-term growth.
“The group currently operates a fleet of seven vessels and intends to retire its 20-year-old Pertama, replacing it with a new 238-berth workboat costing RM130mil, with construction slated to begin in the first quarter of financial year 2026 (1Q26) and span 22 months.
“The younger vessel profile is expected to enhance operational reliability, boost fuel efficiency and reduce maintenance and operating costs,” it added.
On Dayang’s operating capabilities, among others, the research house said its vessel Dayang Opal is one of four workboats that secured three plus three year long-term contracts with PETRONAS Carigali announced in March last year, providing earnings visibility through 2027.
Phillip Capital Research said an expected resolution of the Petroliam Nasional Bhd or PETRONAS and Petroleum Sarawak Bhd or Petros dispute should facilitate the resumption of previously delayed maintenance, construction and modification projects and drive a recovery in offshore activity, supporting higher vessel utilisation.
The research house is reiterating its “buy” rating on Dayang with a 12-month target price of RM2.01 as it remains positive on the company’s earnings prospects, underpinned by its sizeable multi-year order book, which provides long-term earnings visibility.
Furthermore, it is supported by a solid balance sheet with a healthy net cash position of RM261mil and an appealing 6% dividend yield.
“Additionally, key risks include unforeseen delays in work orders, a sharp decline in charter rates and higher-than-expected operating costs,” Phillip Capital Research noted.
