Following the announcement of contract being awarded to Dayang two days ago, we observed the O&G maintenance segment players picked up in prices and volumes. Do note that HLIB Research’s recent O&G (8-Jul-19) strategy, stated that the maintenance space is the bright spot and positive on upstream maintenance players and may register better earnings moving forward. Moreover, Petronas is likely to award its RM4.0bn tender, I-HUC (restructured from existing HUC and Topside Major Maintenance contract) later this year. Market participants could be banking on this information and trade into potential beneficiaries such as Dayang, Carimin and Petra Energy.

DAYANG: Price has been trending sideways between the RM1.34 and RM1.52 levels over the past two months. The ADX indicator is flat without indicating any strong trend forming in the share price. Hence, we are monitoring for a big trend in the near term. Should the price breakout above RM1.52, next target will be set around RM1.60-1.73, Support will be located around RM1.34, followed by RM1.25.

CARIMIN: Share price has retested several times near the 52-W high region over the past 9 months. Meanwhile, the ADX indicator is trending positively (+DMI > -DMI and ADX Line is trending higher). Hence, we believe that CARIMIN is poised to breakout. Next target will be located around RM1.00 and RM1.15. Support will be anchored around RM0.87, followed by RM0.75.

PENERGY: Price has rebounded few rounds along the SMA200 over the past 4 months, forming a valid support around RM0.725 and a trendline breakout last week, accompanied by increase in volumes. The ADX indicator is suggesting that the uptrend could be forming in the near term as +DMI is hovering above -DMI. Hence, we think it may continue to trend higher towards RM0.95, followed by RM1.00. Support will be located around RM0.76, followed by RM0.725.

Source: Hong Leong Investment Bank Research - 5 Sept 2019