Hot Stock Daya Materials jumps 9.5% after subcontract win

by **Cals** Fri 09 Oct 2015, 22:48

Hot Stock

[size=28]Daya Materials jumps 9.5% after subcontract win

By Ahmad Naqib Idris / theedgemarkets.com | October 9, 2015 : 11:16 AM MYT
KUALA LUMPUR (Oct 9): Daya Materials Bhd ([You must be registered and logged in to see this image.] Valuation: 0.90, Fundamental: 0.55) rose 9.5% in mid-morning trades, following the securement of a €17.7 million (RM88 million) subcontract by the group's 67%-owned subsidiary Daya OCI Sdn Bhd.

At 10.54am, Daya gained 1 sen or 9.5% to trade at a high of 11.5 sen, with some 14.8 million shares done.

In a filing with the exchange yesterday, the group said its unit was awarded the subcontract by France-based Axima Concept SA, to provide heating, ventilation and air conditioning equipment and services.

The new subcontract supersedes the consortium agreement it entered into on April 18, 2013.

In a note today, PublicInvest Research said the contract reaffirmed Daya's progress and was within the research house's assumptions.

Although the contract will sustain Daya's performance, PublicInvest noted that there are still some overhang issues regarding its vessel acquisition and management going forward.

"Our view on Daya weighs largely on the outcome of the SD1 acquisition and management of the vessels going forward, hence retaining our 'neutral' call for now with a TP (target price) of 12 sen pegged to a PE of eight times on FY16 EPS of 1.4 sen," said the research house.

Despite the uncertainty over its vessels, PublicInvest said Daya's progress is promising, based on its RM2.3 billion order book and RM1.5 billion tender book of oil and gas and technical services jobs.

(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)

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