$DAYANG / 5141 (DAYANG ENTERPRISE HOLDINGS BERHAD)
Research by Public
Outperform - TP RM4.65

"Sailing on Growth Wave"

Dayang recorded 2QFY24 core net profit of RM139.9m, stronger by 71.7% YoY lifted by both segments, offshore topside maintenance services (TMS) and marine charter. Higher vessel utilisation rate of 91% and elevated daily charter rate (DCR) contributed to a 121% YoY growth in its operating profit. Meanwhile, offshore TMS segmental profit continues to record higher growth (+76.9% YoY) due to higher work order received from oil majors. Overall,1HFY24 results exceed our and consensus estimates at 69.5% and 66.7% of full year forecasts respectively, largely due to better-than-expected utilisation rate. We revise our estimates higher by average of 23% for FY24-FY26F to account for this, as we also expect better performance in 3QFY24 which is usually the strongest throughout the year. Tightness in the offshore support vessel (OSV) market and higher utilisation rate will see its marine charter segment continue to record growth for the next 2 years. We also expect Dayang to secure new contracts in 2H2024 for up to 10 years with more favourable rates. All-in, we retain our Outperform rating with higher TP of RM4.65 (from RM3.75), pegging an unchanged 16x (+1SD above mean) to FY25F EPS.

Analyst:
Khairul Fahmi, CFA
khairul.fahmi@publicinvestbank.com.my