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27 comment(s). Last comment by teoct at Sep 16, 2019 11:43 AM
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14261 posts

Posted by VenFx > Jul 20, 2019 11:24 AM | Report Abuse

So much research done and infos shared ftom teoct .
Big thanx

Airline Bobby
482 posts

Posted by Airline Bobby > Jul 20, 2019 11:35 AM | Report Abuse

Sell before uncle koon sells. That's the intrinsic value I believe :D

214 posts

Posted by ongkkh > Jul 20, 2019 12:33 PM | Report Abuse


665 posts

Posted by pputeh > Jul 20, 2019 1:24 PM | Report Abuse

Having seen the pain so many went through with the lesson many learnt with Heng Yuan (Shell), I will stay away esp if the super investor is promoting the stock. I apologize to you teoct for my comments esp after you had taken so much pain and effort writing these articles. The 'sea' is so full of fishes and I will prefer to catch the 'others' Fools tread where wise man stay away!

763 posts

Posted by pjseow > Jul 20, 2019 2:13 PM | Report Abuse

teoct , thanks again for coming up with such a comprehensive article on dayang business and future potential . The competitive studies showed that dayang has an obvious edge over the other 2 competitors .

12419 posts

Posted by probability > Jul 20, 2019 2:20 PM | Report Abuse

I think IMO 2020 will boost Malaysian sweet crude production tremendously....
pretty sure it will have explosive effect on Dayang.

12419 posts

Posted by probability > Jul 20, 2019 2:30 PM | Report Abuse

even with the same throughput-production output...all malaysian petroleum producer will double or triple their profit due to significant premium our oil will have against other sour crudes..

this profit will trickle down to midstream and downstream players...

2020 might turn out to be the best year for Malaysia

12419 posts

Posted by probability > Jul 20, 2019 3:58 PM | Report Abuse

imagine the effects on bottom line.. a premium of 15 usd/brl from a premium of 4 usd/brl will have

Australian Pyrenees crude sells at record premium ahead of IMO 2020 – sources 28/05/2019


Australian oil and gas company Santos has sold heavy sweet crude Pyrenees at an all-time high premium of more than $10 a barrel as traders continued to stock up the oil ahead of a ship fuel change mandate, three trade sources said on Monday.

* The 600,000-barrel cargo loading in late-July was sold to a trading company at a premium close to $15 a barrel above dated Brent, they said

* Pyrenees is one of a handful of Australian heavy sweet crude grades that are being sold at record premiums because of strong demand from traders who are storing the low-sulphur oil to prepare for a surge in ship fuel demand when IMO 2020 kicks in.

12419 posts

Posted by probability > Jul 20, 2019 4:04 PM | Report Abuse

Petronas have all the incentives to ensure all their rigs in tip top condition for full swing production....they would need to fill up the vacuum created by the unusable sour crude oil

Ricky Yeo
1614 posts

Posted by Ricky Yeo > Jul 20, 2019 8:58 PM | Report Abuse

What kind of moat does Dayang has? Scale economies, network effect, process power, brand, switching cost, counter-positioning, or cornered resources?

Ricky Yeo
1614 posts

Posted by Ricky Yeo > Jul 20, 2019 9:01 PM | Report Abuse

Another thing: When a website or an analyst start throwing many valuations at you i.e DCF, Graham, Warren Buffet, Lynch, Ricky Yeo etc - you can safely ignore those valuation

4328 posts

Posted by deMusangking > Jul 20, 2019 9:02 PM | Report Abuse

if have so mani problems to ask, better f off lah!!!


Ricky Yeo
1614 posts

Posted by Ricky Yeo > Jul 20, 2019 9:05 PM | Report Abuse


12419 posts

Posted by probability > Jul 20, 2019 9:31 PM | Report Abuse

TeoCT, what was the cost of equity used to derive the Intrinsic value? Thats quite important to know..as it means even if you buy at the esrimated IV, your growth..i.e return is as per COE.

Thanks for sharing this Unclestock link. Need to subscribe

12419 posts

Posted by probability > Jul 21, 2019 2:39 AM | Report Abuse

ok i got it...they had used 9.5%


a lot of information there... interesting site.

623 posts

Posted by coolio > Jul 21, 2019 6:29 AM | Report Abuse

Wowww..the unclestock website is super cool.. thanks!!

479 posts

Posted by teoct > Jul 21, 2019 11:22 AM | Report Abuse

Thank you all for the likes, comments and sharing. Indeed, pputeh, one should stay within ones competency. Mine is oil & gas. But did you not like the joke?

deMusangKing, I was reminded of this: Mother Teresa was wandering the corridor and heard a young Sister shouting "F@$# off to the birds on the window ledge". She came in and advised, "Sister, all you had to say is shoo and the birds will F@$# off".

But thank you for visiting and appreciate it very much.

probability, yes CAPM is 9.5% and unclestock is indeed interesting and supercool. This will add to my laziness in studying new counters. I have included it in the write-up to avoid uncertainties. And importantly it is less than the several returns (on capital, equity, etc) for 2018. A positive sign.

Mr Yeo, interesting queries:

a) scale economies, you meant "economy of scale" - yes, Dayang certainly has economy of scale as their vessels will be used much more compared to the other two. Much like Airasia - keep the planes in the air. Base cost divided by more hours used, that is why I said Dayang has pricing power, price setter rather than price taker.
b) network effect - from my limited knowledge, this is more for internet type of businesses like Facebook, Google, etc. But, all the PSCs, production sharing contractors, (Shell, Carigali, ROC etc) - users, will definitely know Dayang and had used their service one time or another and will have experienced their capability and quality of delivery, which is good as far as I know.
c) process power - Carimin, Petra and Dayang will have similar process to implement the MCM works as this processes is quite universal in the other part of oil and gas regions. It will be the quality of delivery (QA/QC) and on time that become important and more importantly the equipment (in this instance, AWB/WB vessels) to deliver the MCM services.
d) Brand - in Malaysia, I would say Dayang has Brand power (in O&G, known to deliver), how to quantify, I am at a lost. In the region, Dayang probably known, but each Nation has their own peculiar requirements that may have impeded Dayang from forging outside Malaysia. The contract in Turkmenistan is via Petronas.
e) switching cost - to the PSCs that has contracts with either Carimin and Petra, it will cost them to switch to Dayang mid-way through current contracts. They will only do so if their appointed contractors are not performing or there is certain critical work that need doing as Dayang has the capability and capacity to response to quickly. However this type of work is rare and Dayang will charge an arm and a leg.
f) counter-positioning - I am at a lost here, looking forward to your clarification.
g) cornered resources - in a way yes. As the vessels under Dayang (& Perdana) are being used (generating cash) while those of Petra, ICON and Sea-link are in anchorage, the longer, the worst off for them. The PSCs are very particular that vessels meet the sea going standards as life is at stack (reputation risk), and these vessels need to be dry-dock every so many years. Each dry-dock will cost millions. Now if there is no jobs, obviously postponed and the longer the postponement, the higher the cost to dry-dock. So, vessels of Dayang becomes more valuable as they are always able to meet requirements. It is not in the conventional sense that Dayang owned all the AWB/WB, then no.

"you can safely ignore those valuation" - I am a bit lost here. Appreciate if you will advice, how then, to value Dayang's intrinsic value.

I was intrigued to actually find that there are so many ways to value a company and I am sure different method will probably be applicable to certain type of company and not to others. I am just too lazy to find out (if that is what you meant). A statistical average sound like a decent estimate of all the different methods at unclestock, after all, these are all estimates, no right nor wrong.

Nevertheless, many thanks for the interesting queries. I hope the clarification clear some (if not all) of the issues.

Happy Sunday.

p/s, gosh all comments received are serious, I hope the joke towards end help some.

479 posts

Posted by teoct > Jul 21, 2019 11:28 AM | Report Abuse

probability - thanks for sharing on the potential higher prices for Malaysian crude. Hibiscus will benefit more than Dayang in this particular case.

Keep them coming mate. Take care.

4 posts

Posted by shankarr007 > Jul 21, 2019 4:29 PM | Report Abuse

thanks for shareing this

623 posts

Posted by coolio > Jul 22, 2019 6:29 AM | Report Abuse

On unclestocks.com, look like the Cash and ST investment in the Balance sheet are wrong from 2016 onwards

479 posts

Posted by teoct > Jul 22, 2019 9:13 AM | Report Abuse

coolio, yes it is different because unclestock considered deposit placed with banks to be not as liquid as unit trust (ST Investment) - "very liquid assets", that is the term unclestock used. Deposit placed with banks might be used as collateral for loans and unclestock has been conservative here.

2131 posts

Posted by dusti > Jul 22, 2019 11:13 AM | Report Abuse

Cold hard truth? Dilution of directors attention? Malaysian directors so incompetent? Rate this C.

479 posts

Posted by teoct > Jul 22, 2019 4:06 PM | Report Abuse

dusti - cold hard truth? Maybe warm truth, not hard as it is a qualitative assessment. But, there is always a but, civil construction industry is one notoriously bad paymaster. There is that possibility of diversion of fund meant for MCM work to the construction work to maintain that (civil) project. When this sort of decision put to the Board, what do you think? I have seen many companies through wanting to increase "shareholder return" (sometime I wonder which shareholder's return) get into jam. The possibility is there.

Now, I am sure all of these three will have 5-years plan to develop the company. Surely capital (working or PPE) would be required. In Petra, they will need to go back to the respective major shareholders to seek approval or even funding (RI/PP). Hey, directors authority (spending) levels are also set, OK. If one research who the major shareholders are, one would come away with reservation/doubt. The major shareholders likely say, fund from internally generated fund or borrowing. With the type of cash flow, most unlikely, so the Board will be frustrated and dishearten. As Mr Yeo said, need CAPEX to renew vessels, etc. which company will have the capability?

Incompetent - I do not think that these (above) are sign of incompetence. But the choices presented for decision making is such. Also, most likely, (independent or otherwise) directors are selected such that they share major shareholders thinking.

A company with founder as director would more likely make decision that benefit him as a shareholder (and more likely minority shareholders too). Sometime it is not RM 1,000 / RM 10,000 / RM 100,000 or RM 2M but RM 800 M decision (RI/PP & sukuk). He himself has to come out with millions as well, do not forget that.

Ok C, fair I suppose without much "hard" facts except my conjecture.

Happy investing.

4 posts

Posted by shankarr007 > Aug 20, 2019 7:24 PM | Report Abuse

<a href="https://www.cgsong.co/">cg song</a>

4 posts

Posted by shankarr007 > Aug 20, 2019 7:25 PM | Report Abuse

<a href="https://www.cgsong.co/">cg song</a>

4 posts

Posted by shankarr007 > Aug 20, 2019 7:25 PM | Report Abuse


479 posts

Posted by teoct > Sep 16, 2019 11:43 AM | Report Abuse

As was mentioned in the article there was intense lobbying. Subsequently, market here-say was the I-HUC cancelled. Carigali had no choice but to proceed to award the HUC contracts accordingly as they have the most new platforms to install and commission.

Petronas Carigali being the largest operator in Malaysia awarded 3 contracts for HUC to Carimin (Angsi only), Dayang (P Msia exclude Angsi) and Petra (Sabah & Sarawak). Unfortunately no value was given in the announcements. Maybe in value would be 15% (Carimin) / 35% (Dayang) / 50% (Petra) of a total value of around RM 1B to 1.5B. Dayang portion would be RM 150M to 225M, not bad at all.

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