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42 comment(s). Last comment by Ricky Yeo at May 27, 2019 8:28 AM
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probability
12142 posts

Posted by probability > Apr 5, 2019 11:07 PM | Report Abuse

Now days in most Engineered capital equipment Supply & Service providers...biggest profits are made on the service segment than capital sales.....

capital investment by customers can only grow to a certain extent....service is almost forever...

need not say on the fat margins services naturally have (cost being mainly the workforce), and the ease of increasing or reducing these resources (skilled labor) as per the changing need, i.e its not a capital intensive business.


probability
12142 posts

Posted by probability > Apr 5, 2019 11:13 PM | Report Abuse

as such the PE rating should definitely be comparable to Serbadinamik level

no way at 7 or 8 like David had used above


probability
12142 posts

Posted by probability > Apr 5, 2019 11:21 PM | Report Abuse

Isn't Dayang just doing what serbadinamik is doing on land, but on sea.....

only difference is they have yet to capture overseas market like what serba had done..


newbie911
988 posts

Posted by newbie911 > Apr 6, 2019 12:21 AM | Report Abuse

Alr up like hell...only comw out with tis article.
Why not write about petron at depress price now....lower downaide but higher upaide than dayang.


probability
12142 posts

Posted by probability > Apr 6, 2019 12:29 AM | Report Abuse

wei, from 4.0 earlier..it alr drop like heaven ma...


pjseow
653 posts

Posted by pjseow > Apr 6, 2019 11:18 AM | Report Abuse

David , good write up .In my opinion, your valuations of Dayang is better than the 3 IBs . Your report cover more details with factual figures than the IBs. You have also consider the outlook of Dayang in longer term rather than just the IB's " next qtr earning is not sustainable " . I am happy that you have also pick up the last qtr "missing " schedule rate revenue which is estimated to be about RM 120 million which in my opinion will be booked in Q1 2019 . In the last 2 weeks , I have commented in bit and pieces in the i3 forum about the missing schedule revenue , the great cash flow of dayang and the brief valuations of dayang using both PE and DCF . I am glad that you have been able to put in nicely in a your write up so that most of the i3 readers can comprehend .


calvintaneng
37776 posts

Posted by calvintaneng > Apr 6, 2019 11:33 AM | Report Abuse

The oil and gas bull will continue for all of 2019 and into 2020 for very strong reasons:

1. Petronas Refinery needs extra 54.7 million barrels of oil a year

2. Brent Crude now over USD70 makes it worth while to extract more oil

3. PH Govt still need Petronas Revenue to help Malaysia

After this short rest dayang should firm up.
Only liability is in perdana's debt load

I think Penergy should also play catch up as it has been included in Both phase 1 and phase 2 ogse jobs

And T7 global will also get follow dayang and penergy because Petronas bypass ogse and award jobs directly to Sme support ogse entities


Goldberg
434 posts

Posted by Goldberg > Apr 6, 2019 11:59 AM | Report Abuse

An impressive writeup with substance. That's how a proper analysis should be done with facts and figures. The 3 IBs should learn from you. I believe the TP should be easily RM2-3 in 6 months time based on your writeup.


probability
12142 posts

Posted by probability > Apr 6, 2019 12:54 PM | Report Abuse

Another valuation method is using Discounted Cash Flow (DCF). Based on past 3 years records on average cash flow generation of 294 mil, let's assume the average cash generated per year in future is 250 million (~10-20% discount), the discounted cash flow per share per year is about 26 sen.

...........................

Using above data from David, which takes the average of last 3 years (under depressed market condition), i think we can use PE 10.....to derive TP of 2.60.

reason being i see its depreciation need and maintenance capex would be almost nil going forward.... its assets which are not utilized can be disposed to generate cash....


Destiny88
114 posts

Posted by Destiny88 > Apr 6, 2019 2:39 PM | Report Abuse

https://klse.i3investor.com/blogs/www.eaglevisioninvest.com/201122.jsp

Buy JTiasa still cheap . Buy low sell high. Forgot about dayang. Already up more than 200% what do you expect ?

https://www.theedgemarkets.com/article/palm-rises-6week-high-stronger-export-outlook

Palm rises to 6-week high on stronger export outlook


freddiehero
12611 posts

Posted by freddiehero > Apr 6, 2019 2:43 PM | Report Abuse

fly together... all be rich rich tis year!


probability
12142 posts

Posted by probability > Apr 6, 2019 3:29 PM | Report Abuse

https://www.forbes.com/asia200/list/#header:country_country:Malaysia

serba is in the list for 2018

2019 will be Dayang (It was on the list in 2014)


Choivo Capital
3439 posts

Posted by Choivo Capital > Apr 6, 2019 3:45 PM | Report Abuse

You're being overly simplistic in your analysis of a highly complex business, in an industry with multiple feedbacks.

Do you remember hengyuan, masteel etc.

How precise your predictions are and how incredible wrong they were?


investi3i4i5
28 posts

Posted by investi3i4i5 > Apr 6, 2019 3:50 PM | Report Abuse

https://klse.i3investor.com/blogs/undervalue_stock/201250.jsp


probability
12142 posts

Posted by probability > Apr 6, 2019 3:51 PM | Report Abuse

wei..dont delete this post of Jon...

Posted by Choivo Capital > Apr 6, 2019 3:45 PM | Report Abuse

You're being overly simplistic in your analysis of a highly complex business, in an industry with multiple feedbacks.

Do you remember hengyuan, masteel etc.

How precise your predictions are and how incredible wrong they were?


VenFx
13575 posts

Posted by VenFx > Apr 6, 2019 4:03 PM | Report Abuse

Jon dont shoot first !
Risk only come for the blind spot unknown...
Afterall, investment is something we trying to do a set of assumption.
Then, u apply a safety of margin by discounting your calculated TP.


Can you enlighten us here ?


Connie555
180 posts

Posted by Connie555 > Apr 6, 2019 9:33 PM | Report Abuse

Choivo boy you are not contributing shit and now you wanna come out and shoot?


Connie555
180 posts

Posted by Connie555 > Apr 6, 2019 9:33 PM | Report Abuse

Choivo boy cant even answer my question now you wanna question others?


i3Value
613 posts

Posted by i3Value > Apr 6, 2019 9:57 PM | Report Abuse

Connie, why delete the Evil Or Angel blog? We were busy discussing choivo, 3rd person Calvintaneng, autism, asperger etc


pjseow
653 posts

Posted by pjseow > Apr 6, 2019 10:09 PM | Report Abuse

choivo ,it will be more constructive if you can objectively point out which parts of David analysis or assumptions are incorrect factually rather than asking a very subjective question on how accurate is his prediction. We will appreciate your comments if you can critique his analysis objectively. We will appreciate more if you can come out with your versions of analysis and prediction.


Connie555
180 posts

Posted by Connie555 > Apr 6, 2019 10:11 PM | Report Abuse

I repost already, out of my heart of sympathy i decided to withdraw it yesterday, however after all seems like he never learn his lesson, so i reposted.


Philip ( buy what you understand)
3897 posts

Posted by Philip ( buy what you understand) > Apr 7, 2019 6:16 AM | Report Abuse

Dear pjseow,

Choivo needs to be treated differently, logic does not apply to him as he prefers making comments than acting on stocks in which he has followed kyy and most money on.

Therefore he has stock loss bias, meaning if he loss money on JAKS, no matter how much you may make, he already is opinionated, because while you may start from a neutral point of view, he starts from a negative one.


mneo
541 posts

Posted by mneo > Apr 7, 2019 9:49 AM | Report Abuse

Oil price is going uptrend.... positive news for O&G companies including Dayang, Hibiscus, etc


VSOLAR Sailang Margin All In
2613 posts

Posted by VSOLAR Sailang Margin All In > Apr 7, 2019 11:23 AM | Report Abuse

unker probability is right lor! Biggest profit for capital items is made in the after sales service! Just like Rolls Royce mah, they make plane engines and sell to customers near the cost of making it. Then they only make profit from the maintenance and repair of the engines! That's how you make money, so if the companies that bought the capital items uses it more then it's good for you!


sosfinance
1284 posts

Posted by sosfinance > Apr 7, 2019 12:16 PM | Report Abuse

science + art = stock market reality. However, sometimes it is the art part that counts. Good write up though.


VenFx
13575 posts

Posted by VenFx > Apr 7, 2019 1:17 PM | Report Abuse

1.37 对我 而言,
还不够 吸引。

1.25以下吧 !


YiStock
1969 posts

Posted by YiStock > Apr 7, 2019 7:40 PM | Report Abuse

Negative Revenue is due to over-provide revenue in previous quarters, right? It made no sense to me the Negative-Revenue is due to cost recognition 1st and revenue later. If so, It will be operating loss, rather than negative revenue. Am i right?


pjseow
653 posts

Posted by pjseow > Apr 7, 2019 8:33 PM | Report Abuse

YiStock, in my opinion, the Negative Revenue for Schedule rate in Q4 2018 was not due to over provision in previous qtrs . The schedule rate revenues for 2018 were 124M , 120M , 127 M and -29 M respectively for the 4 qtrs while for 2017 , they were 97 M, 113M , 75M and 60 M respectively . You can see that the first 3 qtr revenues of 2018 were about 120 M per qtr . It was abnormal and unusual that Q4 has no revenue of schedule rate at all . Even in 2017 , minimum schedule rate revenue was 60 M in Q4 . Even without this revenue ,Dayang already made record profit due to exceptionally high revenue from the lump sum revenue of 269 million. THe management has over met the target . Hence , I suspect they invoice the schedule rate revenue of Q4 into Q1 2019 which was usually the low season . This will " smoothen " the linearity of revenues by qtr.


probability
12142 posts

Posted by probability > Apr 7, 2019 9:07 PM | Report Abuse

https://klse.i3investor.com/blogs/hleresearch/199652.jsp

Orderbook. Current orderbook stands at RM2.9bn including Pan Malaysia Maintenance, Construction and Modification (PM-MCM) contracts from different PSCs. Apart of from existing contracts, Dayang is expected to receive additional lump sum work orders from clients. We understand there are also some variation orders (VOs) that have been carried out last year. All the VO costs have been recognised last year and its profits will be booked in 1HFY19, pending client approval.

..................

It could be extra costs which took place beyond the agreed schedule rate and subject to customer scrutiny before agreeing on the value.

Since it is executed without a prior agreed contract due to urgency or mishaps (procurement of material to facilitate the intended services), the revenue recognizable are subjective to customer agreement.

It may be accounting requirement that these extra costs are recognized as it is executed without a contract in hand.

It is very well possible for Dayang to execute this way knowing Petronas is their key long term customer based on trust.


stockraider
16999 posts

Posted by stockraider > Apr 8, 2019 5:02 PM | Report Abuse

No main main...very serious loh,,,!!


stockraider
16999 posts

Posted by stockraider > Apr 8, 2019 5:06 PM | Report Abuse

Tycoon with more than Rm 500m networth willing to donate Rm 10m here & there, thus the pledge Of Rm 2m underwriting is peanuts to him mah...!!


stockraider
16999 posts

Posted by stockraider > Apr 8, 2019 9:38 PM | Report Abuse

Read carefully loh...in order for u to entitle to the guarantee, which have a composite pool fund of Rm 2m, u must buy Dayang at Rm 1.50 or below and must hold it for at least 9 mths and this cover only maximum 50,000 shares per person.

The offer is effective on 7 april 2019 onwards loh....!!
Meaning u must buy on 8-4-2019 onwards.

At the moment, even if u bought dayang at Rm 1.54, and if the share price subsequently fall below Rm 1.50 u r not entitle for the guarantee claim loh..!!

In fact not many people entitle loh...unless they manage to buy at Rm 1.50 & below today loh....!!

In addition KYY max loss reimbursement is only max Rm 2m.

KYY got alot of trick lah....he knows alot of gimmick mah....!!

This info are fed by raider's lawyer friends loh....!!

Don get con loh.....!!

It is a share moving scam loh.....!!


Ricky Yeo
1593 posts

Posted by Ricky Yeo > May 23, 2019 12:40 PM | Report Abuse

@connie555, yes i don't like to contribute shit, like overly optimistic shit.


stockraider
16999 posts

Posted by stockraider > May 23, 2019 12:43 PM | Report Abuse

Raider already warn u on 8 april mah.....!!


freddiehero
12611 posts

Posted by freddiehero > May 23, 2019 1:27 PM | Report Abuse

fly together all be rich rich tis year......


Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥
9733 posts

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > May 24, 2019 4:14 PM | Report Abuse

Today, it is 91 sen per share.


Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥
9733 posts

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > May 24, 2019 4:17 PM | Report Abuse

Davidslim's analysis is very detail and complex. But it is often so wrong when events unfold post his analysis.


Essentially, he has not proven his ability in giving good analysis of stocks.


It is better to be approximately right than to be absolutely wrong.


Fabien "The Efficient Capital Allocater"
1515 posts

Posted by Fabien "The Efficient Capital Allocater" > May 24, 2019 4:27 PM | Report Abuse

From his perspective/intention, his analysis is not wrong.


pjseow
653 posts

Posted by pjseow > May 24, 2019 4:40 PM | Report Abuse

3i,can you point out which part of his analysis is wrong. With Q1 2019 result published yesterday,the 4 qtr rolling eps is 18.78 sen and PE of 4.9 with current share price of 91 sen. What he stated in his analysis are all facts. You should not use the market pricing which can swing up and down to say that he is so wrong. Mr markets are filled with emotions . The market can swing +and -50% without any change in the fundamentals.


qqq3
13754 posts

Posted by qqq3 > May 24, 2019 5:31 PM | Report Abuse

that is david style......................can make money or not don't know lah.


too complex and too detail...can see the trees but don't know whether can see the forest?


dayng is quality share or not?


calvintaneng
37776 posts

Posted by calvintaneng > May 25, 2019 12:23 AM |

Post removed. Why?


Ricky Yeo
1593 posts

Posted by Ricky Yeo > May 27, 2019 8:28 AM | Report Abuse

@pjseow - As far as my understanding, 50% of this article is about extrapolating the past into the future. You would agree everything about the future is not 'fact' but hypothesis. Just as I can state the same kind of fact but come to a totally different conclusion.

The elephant in the entire article is the $294 mil cash flow over the past 3 years, and the assumption if that can be maintained over the next 3-5 years, then Dayang is worth PE 7-8 and price XXX. Based on an equity of $1.3 bil. The ability to generate that amount of cash flow in the long run is like amazing (22%). Literally putting it in the top 5% of bursa.

But no one talks about the fade rate, how long can this go? Oh right, someone forgot to talk about depreciation of close to $130 mil per year. Purchase of PPE has not been keeping up with depreciation, accounting for only 10% over the past 3 years. Yes sure Dayang can pay off all the debt in record time. And how long before they can skim on purchase PPE before the big bills comes in to normalised the cash flow figure?

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