Stock Name: DAYANG
Company Name: DAYANG ENTERPRISE HOLDINGS BHD
Research House: RHB

KUALA LUMPUR: Shares of Dayang Enterprise Bhd fell in the afternoon session on Tuesday, Nov 9 despite the stronger earnings and upbeat outlook for the company but some investors might not have favoured its rights issue plan,

At 3.04pm, it was down 11 sen to RM2.93 with 2.28 million shares done. The FBM KLCI rose 3.15 points to 1,522.99. Turnover was 1.0 billion shares valued at RM1.18 billion.

Dayang's third quarter earnings doubled to RM22.63 million from RM11.03 million a year ago due to higher value of work orders received and performed.

It also proposed a one-for-four bonus issue of 88 million new shares and also a renounceable rights issue of 110 million new shares on the basis of one rights shares for every four shares held.

RHB Research said the near-term outlook for Dayang was positive on sustained news flow.

'After our earnings revision, our fair value has been raised to RM3.86/share (from RM3.01 previously), based on FY11 EPS of 25.7 sen on unchanged 15 times PER. This implies an upside of 26.9%. Maintain Outperform,' it said.