Oil price has come down to USD51 per barrel.

How much further it can go down ? USD40 ? Possible...

But I find it difficult to believe that oil price can forever stay at such depressed level. 

One day it will rebounce... I just don't know when.

It seemed that many people share this view as well. In the past few days, market sentiment has improved. Can feel the fear subsiding and greed creeping back.

(Not so chicken anymore)

Even though I don't know whether the oil and / or stock market has bottomed, I feel that there is no harm to start nibbling on some bombed out oil and gas stocks.

Dayang looked interesting.

(Dayang past one year share price)

The company has market cap of RM2.28 billion (based on 877 mil shares and RM2.60).

Based on past twelve months cumulative net profit of RM169 mil, historical PER is 13 times.

However, going forward, the group is expected to report significantly higher earnings as they start executing the huge contracts they secured last year.

I have not carried out a detailed study of the group's operations (nibbling only mah...). However, based on RHB Investment Bank and Public Investment Bank's average analyst forecasts (both extracted from klsei3investor website), the group might report approximately RM239 mil and RM251 mil net profit for FY2015 and FY2016 respectively.

This translates into prospective PER of 9.5 and 9 times respectively.

Earnings visibility is good as the group has order book of RM4.2 billion. Even without any more new contracts, the jobs in hand is sufficient to last them until 2018.

Balance sheet is strong with net assets of RM755 mil, RM168 mil loans and cash of RM93 mil. Net gearing is less than 10%.

Major shareholder is Naim Holdings (also listed) and Sarawak's Sepawi family. These two parties are closed to the Sarawak government.

The group is very well managed (as good as Dialog, in my opinion).

In view of the above, when come to Sarawak, Dayang should be the primary beneficiary for Petronas' contract flows.

Have a nice day.