Stock Name: DAYANG
Company Name: DAYANG ENTERPRISE HOLDINGS BHD
Research House: RHB
KUALA LUMPUR: RHB Research Institute is maintaining its Outperform call on Dayang Enterprise Bhd with a new fair value of RM3.54'' a share based on 15x CY11 PER (from RM3.36 previously at an unchanged target PER).
It said on Tuesday, Jan 25 Dayang has high hopes of winning at least one of the upcoming topside maintenance contracts which are worth a cumulative RM2 billion (Sarawak: RM1 billion; Peninsular and Sabah: RM500 million).
'Assuming Dayang is successful its order book will increase by nearly twofold to RM1.86 billion.'' We expect the company's cash pile to grow to nearly RM300 million after its rights issue and Borcos stake divestment. This will most likely be utilised for fleet expansion, to beef up its core operations for the upcoming topside and maintenance contracts. For M&A possibilities we expect the company to look within the industry (e.g. Petra Energy, Shapadu) instead of diversifying into another business (marginal oilfield),' it said.
RHB Research Institute increased its net earnings estimates for FY10-12 by 10.6%, 5.4% and 0.1% respectively on the back of new contract wins of RM800m in FY11.
'Overall we still like the company for: 1) its position as one of the main brownfield/topside maintenance players in Malaysia; and 2) its solid earnings track record thus far, which will continue to support its order book replenishment going forward,' it said.
Company Name: DAYANG ENTERPRISE HOLDINGS BHD
Research House: RHB
KUALA LUMPUR: RHB Research Institute is maintaining its Outperform call on Dayang Enterprise Bhd with a new fair value of RM3.54'' a share based on 15x CY11 PER (from RM3.36 previously at an unchanged target PER).
It said on Tuesday, Jan 25 Dayang has high hopes of winning at least one of the upcoming topside maintenance contracts which are worth a cumulative RM2 billion (Sarawak: RM1 billion; Peninsular and Sabah: RM500 million).
'Assuming Dayang is successful its order book will increase by nearly twofold to RM1.86 billion.'' We expect the company's cash pile to grow to nearly RM300 million after its rights issue and Borcos stake divestment. This will most likely be utilised for fleet expansion, to beef up its core operations for the upcoming topside and maintenance contracts. For M&A possibilities we expect the company to look within the industry (e.g. Petra Energy, Shapadu) instead of diversifying into another business (marginal oilfield),' it said.
RHB Research Institute increased its net earnings estimates for FY10-12 by 10.6%, 5.4% and 0.1% respectively on the back of new contract wins of RM800m in FY11.
'Overall we still like the company for: 1) its position as one of the main brownfield/topside maintenance players in Malaysia; and 2) its solid earnings track record thus far, which will continue to support its order book replenishment going forward,' it said.
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