Dayang wins HUC contract from Murphy

Business & Markets 2013
Written by MIDF Research
Wednesday, 08 May 2013 10:51
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DAYANG ENTERPRISE HOLDINGS BHD []
(May 7, RM4)
Maintain buy at RM3.74 with a revised target price of RM4.41 (from
RM3.95): Dayang has secured a contract worth RM313.6 million from
Murphy Sarawak Oil Co Ltd for the provision of hook-up and
commissioning (HUC) and topside major maintenance services for
Murphy’s offshore assets. This contract is for five years, from 2013 to
2018, with an optional one year extension.
In our initiation coverage report, we conservatively assumed Dayang
would secure only RM1 billion worth of contracts in 2013, primarily from
Shell Malaysia’s HUC works. As such, with the inclusion of this contract
win from Murphy, we increase our new order book assumption to
RM1.5 billion. This would translate into an increase of 7.3% to our 2013
financial year (FY13) earnings forecasts and 11.6% to FY14.
We maintain our “buy” call on Dayang with a new target price of RM4.41 per share and FY14 price-earnings ratio of 14 times
on the back of FY14 earnings per share of 31.5 sen. We believe that with the passing of the general election and the
incumbent government once again securing a five-year mandate, we can expect the flow of contracts to sustain the strong
momentum since the start of the year. We are overall bullish on the oil and gas sector and expect Dayang to be one of the
key beneficiaries this year. — MIDF Research, May 7