Dayang Enterprise Holdings Berhad

PHILLIP RESEARCH 2025 MALAYSIA STRATEGY

Plenty of opportunities.

We remain upbeat on Malaysia’s market in 2025, driven by sustained FDI, a stronger Ringgit, robust domestic liquidity, positive economic trend, corporate earnings growth, and the realization of MNC investment commitments

Risks to the KLCI include potential foreign inflow slowdown due to tariffs and a stronger US dollar under Trump. Small-mid-cap stocks offer a better risk-reward, bolstered by strong thematic growth drivers

Focus on corporates with thematic-driven earnings Consensus projects KLCI EPS to grow 8% YoY in 2025E, following a 12% YoY growth in 2024E. Banks, Construction, Technology and Gloves are expected to be key earnings growth drivers within our coverage universe. Several themes are likely to drive stronger market performance in 2025, including 1) sustained FDI growth, 2) acceleration of infrastructure spending, 3) rapid AI adoption, 4) rising focus on local green energy, 5) expanding DCs infrastructure, and 6) glove sector recovery on the back of China tariffs.

$AGX / 0299 (AGX GROUP BERHAD)
$DAYANG / 5141 (DAYANG ENTERPRISE HOLDINGS BERHAD)
$HEGROUP / 0296 (HE GROUP BERHAD)

$MGB / 7595 (MGB BERHAD) 50%
$JTIASA / 4383 (JAYA TIASA HOLDINGS BHD) 25%
$DAYANG / 5141 (DAYANG ENTERPRISE HOLDINGS BERHAD) 25%

$DAYANG / 5141 (DAYANG ENTERPRISE HOLDINGS BERHAD)
Research by PBIV

$DAYANG / 5141 (DAYANG ENTERPRISE HOLDINGS BERHAD)
Research by KENANGA

$DAYANG / 5141 (DAYANG ENTERPRISE HOLDINGS BERHAD)
Research by RHB

$DAYANG / 5141 (DAYANG ENTERPRISE HOLDINGS BERHAD)
Research by HLIB

$DAYANG / 5141 (DAYANG ENTERPRISE HOLDINGS BERHAD)
Research by CGSI

@LittleShare @weiwenn928 @boncos @zhexiangxd it's sad to see weakness in oil n gas names. Sector was supposed to be a bright spark this year onwards but due to squabble between Sarawak and Petronas, it got dragged down.

Additionally - now that Trump had won, there's pressure on oil price.

Regardless, opex spending will continue and capex too (despite what could be a lower amount), both leading to continuous earnings potential from the companies within the sector. Hopefully fundamentals will eventually prevail.

$CARIMIN / 5257 (CARIMIN PETROLEUM BERHAD) $DAYANG / 5141 (DAYANG ENTERPRISE HOLDINGS BERHAD) $PERDANA / 7108 (PERDANA PETROLEUM BERHAD) $UZMA / 7250 (UZMA BERHAD) $DELEUM / 5132 (DELEUM BERHAD)

$CARIMIN / 5257 (CARIMIN PETROLEUM BERHAD) recently won 2 Pan Malaysia tender, Package B5 and B9. Assuming that these packages are similar o those won by $DAYANG / 5141 (DAYANG ENTERPRISE HOLDINGS BERHAD), then the details of these contracts can be extracted by the many professional coverage from its peers, which are:

- Duration of 5 years plus 3 and 2 years extension options
- No contract value as it is based on call-out work order
- Estimate of RM1b each package for its firm period hence RM2b in total
- Intense competition for the bidding process, winning it is a testament of track record
- Projected margin of around 20%
- Potential of RM400m profit up for grabs in the next 5 years.

Will be attending its AGM next week to confirm these details. Anyone else going? hehe

@weiwenn928 @zhexiangxd @terence775 @LittleShare @boncos @ubaidahlifestylez @LaoLang

$DAYANG / 5141 (DAYANG ENTERPRISE HOLDINGS BERHAD)
Research by RHB

Analysts are positive about Dayang Enterprise Holdings Bhd’s prospects, given its potential to secure more Pan-Malaysia-related contract packages in Sarawak.

Dayang Enterprise Holdings Bhd is in a favourable position to clinch the decommissioning jobs in Sarawak from Petroliam Nasional Bhd (PETRONAS) by next year.

$DAYANG / 5141 (DAYANG ENTERPRISE HOLDINGS BERHAD)
Research by HLIB

Perdana Petroleum Bhd has accepted a work order award from Dayang Enterprise Holdings Bhd to charter two accommodation workboats (AWB).

Dayang Enterprise Holdings Bhd’s recent contract win is estimated to contribute about RM15mil to RM17mil in earnings, based on a 20% net profit margin.

PETALING JAYA: Perdana Petroleum Bhd has accepted a work order award from Dayang Enterprise Holdings Bhd to charter two accommodation workboats (AWB).

PETALING JAYA: Dayang Enterprise Holdings Bhd’s latest contract win for the provision of six accommodation workboat vessels (AWBs) to PETRONAS Carigali Sdn Bhd (PCSB) is projected to add up to RM17mil in net profit for its financial year ending Dec 31, 2025 (FY25).

PETALING JAYA: Dayang Enterprise Holdings Bhd (DEHB) has received six work order awards from PETRONAS Carigali Sdn Bhd (PCSB) for the provision of six units of accommodation workboat vessels.

PETALING JAYA: Dayang Enterprise Holdings Bhd (DEHB) has received six work order awards from PETRONAS Carigali Sdn Bhd (PCSB) for the provision of six units of accommodation workboat vessels.

RHB TOP PICKS Q4 2024

$MPI / 3867 (MALAYSIAN PACIFIC INDUSTRIES BERHAD) $DAYANG / 5141 (DAYANG ENTERPRISE HOLDINGS BERHAD) $GCB / 5102 (GUAN CHONG BERHAD) $FOCUS / 0116 (FOCUS DYNAMICS GROUP BERHAD) $SIMEPROP / 5288 (SIME DARBY PROPERTY BERHAD)

KENANGA TOP PICKS Q4 2024

Play broadening out. Post US Federal Reserve’s pivot, Malaysia should remain in a sweet spot as a net beneficiary of equity inflows, thanks to stable interest rate, and relatively appealing valuation versus historical norms. Unsurprisingly, recent market interest has largely been in blue chips, but we see broadening out in foreign interests in key sectors beyond the comfort zone of large caps, such as in banks which is somewhat underway.

Overhang removal play. In 4QCY24, we anticipate news on telco overhang removal for mobile network operators, dovetailing into tech plays to be rekindled as data centre ramp up to fit-out stage. Historically October is a quiet month, but we anticipate 4QCY24 to get more vibrant as domestic news flow ramp up, including Budget 2025, for positioning into more volatile names. Externally, sentiment improvement in US stocks is typical after US elections (5th November).

Negatives priced-in play. Sectors such as oil and gas have been unjustifiably de-rated beyond their fundamentals. Also, as value have emerged, we recently upgraded the glove sector on demand-supply rebalancing (tariffs notwithstanding), and automotive sector.

$DAYANG / 5141 (DAYANG ENTERPRISE HOLDINGS BERHAD) $DIALOG / 7277 (DIALOG GROUP BERHAD) $TGUAN / 7034 (THONG GUAN INDUSTRIES BERHAD) $WASEONG / 5142 (WAH SEONG CORPORATION BERHAD) $MKH / 6114 (MKH BERHAD)

$DAYANG / 5141 (DAYANG ENTERPRISE HOLDINGS BERHAD)
Research by RHB
Buy - TP RM3.90

"Records Major Leap In Profits; Keep BUY"

Keep BUY, new MYR3.90 TP from MYR3.58, 50% upside with c.2% FY24F yield. Dayang Enterprise delivered another strong set of results for 1H24, thanks to stronger topside maintenance (TMS) work orders and marine segment contributions. We continue to like the stock – the firm is a key beneficiary of a step-up in upstream maintenance activities and robust OSV demand, while staying relevant in the new contract lifecycle.

Analyst:
Sean Lim, CFA
sean.lim@rhbgroup.com

$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

$DAYANG / 5141 (DAYANG ENTERPRISE HOLDINGS BERHAD)
Research by Kenanga
Outperform - TP RM3.80

"Another Record-Breaking Quarter"

Dayang outperformed both our and consensus expectations due to stronger-than-expected performance in its offshore topside
maintenance (TMS) and marine divisions. The group is likely to secure the umbrella contract for topside maintenance from FY25 onwards, which will underpin its robust work order outlook. We increase FY24/25F forecast, raise TP by 15% TP to RM3.80 (from RM3.31). Maintain OUTPERFORM.

Analyst:
Lim Sin Kiat, CFA
limsk@kenanga.com.my

$DAYANG / 5141 (DAYANG ENTERPRISE HOLDINGS BERHAD)
Research by HLIB
Buy - TP RM3.22

"Record high quarterly performance"

Dayang reported 2Q24 core bottom line of RM129.2m, bringing 1H24’s sum to RM167.9m. The results beat our (65%) and street (67%) estimates. Core earnings jumped +58.4% YoY,+1.6x YTD, driven by skyrocketed EBIT from Offshore TMS (+76.9% YoY, +113.8% YTD) and Marine Charter (+124.9% YoY, 6x YTD), due to higher work orders being awarded from oil majors and stronger vessel utilisation, coupled with improved DCRs for both own and third-party vessels. Raise our FY24/25/26f earnings by 25%/11%/8%. Post rolling over our valuation base year to mid-FY25, we maintain BUY call with slightly higher TP of RM3.22 (from RM3.12). Our TP is based on a lowered P/E multiple of 12x (from 14x typically ascribe to OGSE names) given the sector-wide de-rating induced by Petronas’ potential capex cut.

Analyst:
Brian Chin
brianchy@hlib.hongleong.com.my

$DAYANG / 5141 (DAYANG ENTERPRISE HOLDINGS BERHAD)
Research by CGS
Add - TP RM4.00

"A blowout quarter"

■ DEHB’s 2Q24 normalised net profit of RM129.7m was a new quarterly record, due to higher OSV earnings and work orders for its core operations.
■ Management indicated 3Q24F could also be as strong. 1H24 results were a strong beat to our above-consensus forecasts.
■ Reiterate Add and GGM-based TP of RM4.00. We see the 16% pullback from its recent high in Jun 2024 as a good opportunity to accumulate.

Analyst:
Dharmini THURAISINGAM
dharmini@cgsi.com

$DAYANG / 5141 (DAYANG ENTERPRISE HOLDINGS BERHAD)
Research by CGS
Add - TP RM4.00

"A prelude to a strong 2Q24F"

■ PETR’s 1H24 normalised net profit nearly tripled yoy with vessel utilisation in 2Q24 hitting its highest level since 3Q19.
■ The strong performance by PETR is a positive read-through for DEHB, in our view, and could lead to potential upside surprise to its 2024F earnings.
■ Reiterate Add with an unchanged GGM-based TP of RM4.00. DEHB remains one of our top picks in the Malaysian O&G sector and broader market.

Analyst:
Dharmini THURAISINGAM
dharmini@cgsi.com

$DAYANG / 5141 (DAYANG ENTERPRISE HOLDINGS BERHAD)
Research by Kenanga
Outperform – TP RM3.31

“Inclusion in the OSV Panel"

DAYANG has been appointed by Petronas Carigali as one of the panel contractors for offshore support vessels (OSVs) for a three-year period. This is a positive development, as it allows DAYANG to potentially benefit from higher charter rates for its vessels in the coming years. We maintain our earnings forecasts as we have already imputed 80% vessel utilisation and 13% rate increase for its vessels for FY24F and FY25F, TP of RM3.31, and OUTPERFORM call.

Analyst:
Lim Sin Kiat, CFA
limsk@kenanga.com.my

Oil and gas services provider Dayang Enterprise Holdings Bhd’s earnings will likely reach a record high this year and into 2025, buoyed by stronger order flows, and higher vessel utilisation and charter rates.

@terence775 I'm personally still bullish on $CARIMIN / 5257 (CARIMIN PETROLEUM BERHAD) and find it a potential laggard play for 2nd half of the year.

For one, its share price have not moved as much as its main peers in its main business - like $DAYANG / 5141 (DAYANG ENTERPRISE HOLDINGS BERHAD) and $PENERGY / 5133 (PETRA ENERGY BERHAD), or even if compared to the likes of other marine services players like $PERDANA / 7108 (PERDANA PETROLEUM BERHAD) or the newly listed KEYFIELD.

The reason could be due to a pretty disappointing past 2 quarter results which can be expected due to low season (monsoon) leading to low utilisation of vessels, as well as - according to channel checks - a dry docking in the December quarter which caused them to incur cost plus revenue loss.

But a combination of better full swing utilisation at high DCR RM150k per day should bode well for CARIMIN (calculate yourself and use a % as a margin). Historically Q1 and Q4 is also the strongest for the company.

Lastly, the impairement write back - despite being a non cash item - will help to make FY24 a record year for the company, and as you pointed out - they're also one of the few NET CASH oil n gas companies in Malaysia.