Dayang Enterprise; Buy; RM1.95
Price Target: RM2.70; DEHB MK

Dayang announced that it has clinched a new contract from Talisman Malaysia Limited (Talisman) for topside maintenance services expected to be worth RM125m for a primary period of 3 years with 2 extension options of 1 year each.

The contract does not come as a surprise to us as we have mentioned previously that it was bidding for maintenance jobs from Talisman. We view its latest contract positively, boosting its outstanding order book to c.RM1.5bn which is more than enough to last for the next 3 years. Including the RM85m contract extension from Shell awarded in Jan12, Dayang has already secured RM210m worth of new contracts which bode well for its prospects going forward.

We reiterate our Buy call for Dayang with RM2.70 TP, based on 15x FY12 EPS, implying 42% upside potential. We continue to favour Dayang's chances of clinching more contracts going forward as we expect the company to ride on the robust O&G activity in Malaysia by leveraging on its niche expertise in the hook-up commissioning and maintenance services.

Source: HwangDBS Research 15 Feb 2012