Overnight, Dayang announced that it has been awarded three contracts for the provision of accommodation work boats – namely Dayang Zamrud, Dayang Opal and Dayang Ruby from Petronas Carigali. We are positive in regard to these job wins. The duration for the said contracts is approximately 214 days effective from 3 Feb 2023 with an option to extend for another 60 days. We highlight that there is no contract value disclosed and therefore we are not able to undertake any detailed analysis at this juncture. We make no changes to our estimates as we choose to be conservative. We maintain our BUY recommendation with an unchanged TP of RM1.87 - based on 14x FY24f profits, which is in-line with the multiple ascribed to all of the OGSE providers in our coverage. Dayang is one of our top picks for the sector.

NEWSBREAK

Overnight, Dayang announced that it has been awarded three contracts for the provision of accommodation work boats – namely Dayang Zamrud, Dayang Opal and Dayang Ruby from Petronas Carigali.

HLIB’s VIEW

Distinctly positive. We are positive in regard to these job wins. The duration for the said contracts is approximately 214 days effective from 3 Feb 2023 with an option to extend for another 60 days. We highlight that there is no contract value disclosed and therefore we are not able to undertake any detailed analysis at this juncture.

Outlook. We expect Dayang’s steady and strong performance to sustain in 2023 as recent ground checks have indicated: (i) improved job orders from regional oil majors amidst elevated oil prices; (ii) improved job contract values across the board for most service provider value chain by more than 15% for MCM and i-HUC works; and (iii) improved projected blended vessel utilisation rates and DCRs for both Dayang and Perdana Petroleum in FY23f. We believe that 2023 will be a golden year for the oil and gas service providers – a laggard theme to the elevated oil price environment for the past year.

Forecast. No changes to our estimates as we choose to be conservative.

Maintain BUY; TP of RM1.87. We maintain our BUY recommendation with an unchanged TP of RM1.87, based on 14x FY24f profits, which is in-line with the multiple ascribed to all of the OGSE providers in our coverage. Dayang is one of our top picks for the sector.

Source: Hong Leong Investment Bank Research - 28 Feb 2023