Dayang Enterprise Holdings Bhd

Bursa: 5141

History Repeats Itself

History Does Not Repeat Itself, But It Rhymes

The 2^nd quarter result is a breakout quarter – in Dayang’s history, the RM 263.41M is the highest on record.

Similarly, Offshore TMS of RM 224.35M is also the highest for a 2^nd quarter on record.

Nonetheless, taking a conservative approach, the 3^rd & 4^th quarter is estimated to be 310M & 255M giving a total of 988.5M for FY 2022.

The revenue mirrors the trend of 2018 to 2019.

2021 was subjected to movement control, thus resulting in lower revenue.

Now 2022, movement control has been lifted and work completed follow 2019 very closely (for first 2 quarters).

Typically, 1^st & 4^th quarter revenue is lower due to the monsoon season.

Potentially, 3Q might match that achieved in 2019 while 4Q is iffy as it is weather dependent, thus 988.5M is a reasonable estimate.

Due to long-lead time to prepare for the execution of work offshore, Q3/Q4 revenue is firm and no longer dependent on the movement of oil price as material need to be ordered, vessel slots booked and manpower sourced and confirmed.

Using a net profit margin of 15.2% (average 2014 to 2020 – excluding 2017) and 1,152 million shares gives:

EPS = 13 sen

For 2019, net profit margin was 21.2%, the EPS adjusted for 1,152 million shares is 19.2 sen.

Potential share price in the coming six to nine months depends on market appetite / sentiment.

Upside:

1. Higher net profit margin (nearer to 20%)
2. Higher utilization of vessels
3. Higher Q3 revenue
4. Higher Q4 revenue due to calmer weather

Downside

1. Outbreak of Covid 19
2. Vessel’s outage
3. Early & bad monsoon

Happy investing.

Disclaimer:

I wrote this myself without pay. I and my families own Dayang shares. This is not an advice to buy / sell Dayang or any other equities / securities / assets.