PETALING JAYA: Dayang Enterprise Holdings Bhd
is poised for a recovery in offshore maintenance activity as a potential resolution to the Petroliam Nasional Bhd (PETRONAS) and Petroleum Sarawak Bhd (Petros) dispute could help revive delayed work orders in Sarawak, according to AmInvestment Bank Research (AmResearch).
The research house said it believed the PETRONAS-Petros negotiations were “nearing” resolution, which would provide greater clarity for upstream activities in the state.
“We believe the PETRONAS-Petros resolution is nearing, with the PETRONAS Carigali-Vestigo transition providing a positive signal that delayed activity shall resume,” it said, without providing further explanation.
PETRONAS Carigali Sdn Bhd, PETRONAS’ wholly-owned exploration arm, owns Vestigo Petroleum Sdn Bhd, which manages marginal and mature oil and gas assets.
AmResearch said Dayang’s RM4.7bil order book provides “a solid base for recovery once work-order conversion improves”. The order book covers maintenance, hook-up and commissioning, minor modification and production optimisation work, it added.
Beyond Malaysia, Dayang is also pursuing maintenance opportunities in Saudi Arabia and Brunei, although any contribution is unlikely before 2027, AmResearch said.
In Saudi Arabia, it said Dayang has received an invitation to bid from a main contractor for a contract worth about RM1bil under a 50:50 local partnership, though discussions remain at a preliminary stage.
In Brunei, AmResearch said Dayang’s 50:50 joint venture with Brunei-based Petrokon Utama Sdn Bhd (PUSB), formed on May 27, is tendering for a three-year maintenance contract worth US$250mil and a one-year transportation and installation scope worth US$50mil.
The research house said Dayang’s new vessel would further expand its capacity from 2028, providing additional room for growth as offshore maintenance activity recovers.
On the financial front, Dayang’s first-half core net profit of RM54.8mil, down 17% year-on-year (y-o-y), came in below expectations, accounting for only 24% of its full-year forecast and 30% of consensus’ estimates.
“While we had anticipated softer activity y-o-y, the slowdown was more severe than expected,” AmResearch said.
As a result, AmResearch cut its financial year ending Dec 31, 2026 (FY26) and FY27 earnings forecasts by 50% and 12%, respectively, to reflect more conservative assumptions on order book conversion.
Conversely, it raised the FY28 earnings forecast by 4%, anticipating higher vessel utilisation as activity recovers.
Following the FY26 earnings “reset”, the research house expects Dayang’s core earnings to rebound 102% in FY27 and another 23% in FY28, implying a two-year compound annual growth rate of 58%.
This assumes order book conversion in its topside maintenance services segment improves by 12 percentage points to 16% in FY27, while utilisation in its marine charter segment rises by 12 percentage points to 74%.
AmResearch has maintained a “buy” call on Dayang, but lowered the target price to RM2 from RM2.30 previously, based on an unchanged 10 times price-to-earnings multiple.
“We remain positive on Dayang as a beneficiary of higher upstream capital expenditure and an eventual resolution of the PETRONAS-Petros dispute, which would unlock further work in Sarawak.”
The research house retained a FY27 dividend per share forecast of 14 sen, implying a dividend yield of about 9%.
