Kenanga positive on Dayang Enterprise’s fleet expansion

Kenanga positive on Dayang Enterprise’s fleet expansion
Business & Markets 2013
Written by Jeffrey Tan of theedgemalaysia.com  
Friday, 06 September 2013 10:38

KUALA LUMPUR (Sept 6): Kenanga Research views Dayang Enterprise Bhd's acquisition of a vessel positively and maintained its ‘outperform’ call with unchanged target price of RM6.06 on the stock.

“We are not surprised by the announcement as we understand that Dayang was looking for additional vessels to accommodate the RM3.6 billion worth Pan Malaysia Hook-up and commissioning contract,” said Kenanga Research analyst Cezzane See.

In a note today, See said the target price was retained at RM6.06 based on 15 times of CY14 earnings per share of 40.4 sen.

She said the FY13E-FY14E estimates were maintained, as she believed the new vessel would be utilized for the existing backlog order.

“Dayang’s longer term prospects are strong given that around 77% of its order book worth RM4 billion extends till 2018,” she added.

Meanwhile, See cautioned against a downturn in the oil and gas sector, which could result in delays in contract rollouts.

A delay in the Pan-Malaysia HUC project could dampen potential earnings being recognized in the year, she said.