Dayang Enterprise (Dayang) secured a contract extension for the provision of Pan Malaysia Maintenance, Construction and Modification (PM-MCM) works from JX Nippon. The original contract was awarded in 2018 for a duration of 5 years, with the option to extend by 1 year. The contract has been extended by 1 year and 5 months until December 2023, longer than the original optional period. As stated in our report issued on 14th July, the contract extension comes as no surprise to us given robust offshore maintenance activities and time constraints for clients to issue new tenders for competitive bidding. We expect a few more contracts will be extended as they reach expiry within 2H 2023. We reiterate our optimistic view on the Group’s outlook with strong orderbook c. RM1.48bn. We also expect the Group’s earnings to return to full swing from 2Q onwards, post monsoon season. Our Outperform call is retained with TP of RM1.85 pegged to 12x PER over FY24 EPS.
Source: PublicInvest Research - 27 Jul 2023
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