Dayang - RM 3 per share?

Dayang has recently appreciated to RM 1.90+. Is this the highest, can it go higher? Below are quarterly revenue for 2014 - just before oil price dropped, and from 2019 to 2023.  Three forecaste is provided for 2023, L for low, M for medium and H for high.

 

Quarterly revenue of Dayang is cyclical. This is clear in the graph below.

Investors generally have adverse reaction to this cyclical nature, giving opportunity to others to profit. As always, there is exception, 2015 was one.

Now, again, this opportunity arises. Q3 result would be announced soon, 3^rd week of this month.

Q2 revenue and net profit are both record for 2nd quarter, further, margin has improved.

Q3 & Q4 result

A) The followings had been reported:

1. Higher daily charter rate for Dayang’s vessels AND Perdana’s vessels. Dayang owned 63.67% of Perdana, and when Perdana do well, Dayang do better.
2. Higher utilization of vessels for both Dayang and Perdana, it is expected to be above 80% for Q3
3. Higher contract rates for MCM, and eight such contracts extended to end 2024.
4. Scope expansion for Carigali MCM contract to include Sarawak Gas – i.e., increased contractual areas leading to more work

B) In the Q2 report, the section on “Prospects” stated that 2nd quarter’s good performance may be sustained in the remaining quarters of 2023. Dayang has always been conservative in their reports.

C) Finally, Datuk Ling, a substantial shareholders and Director bought a total of 1,000,000 shares on 19 & 20 October 2023.

Below is a review of past years results.

The forecasted Q3 revenue is about RM 400 million as per above table and graph.

Q4’s revenue forecasted to be between 170 to 265 million, this depends on the weather - NE monsoon.

As margin has improved, net profit for FY could be 183 to 195 million and EPS might be 15.8 to 17.4 sen. The net margin of 18.6% is best on a larger dataset.

Average PER, 14.55 (excluding 2020), gives potential Dayang share price between 2.30 to 2.53.

Finally, looking at the healthy cash flow at six-month and year end, there is a high probability that dividend of more than 3 sen per share be declared for FY2023.

There are many variables – revenue, net margin, price earning ratio and most important, weather, do take note.

Happy investing.

Contracts extension announced

On 11 Jul 2014, Dayang share reached 3.63. That year, Dayang’s revenue was only 877 million, eps 15.64 giving PER of 23.21. There are also many analysts stating the 5-year average PER is around 17.3 to 18.8. Potential, investors / punters / speculators / might view Dayang’s coming FY 2023 potential as above average to move the price beyond forecasted 2.53 …

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.