Small Caps In Focus

(DEHB MK, CP: MYR2.40, NR) - Secured six new orders from Petronas Carigali

Dayang Enterprise announced that its wholly-owned subsidiary DESB Marine Services S/B has received six work orders from Petronas Carigali S/B to provide six units of accommodation work boat vessels. No value was disclosed as it is based on work orders issued at clients’ discretion.

The latest job order will help to shore up its orderbook. Dayang has an estimated outstanding call-out contracts of MYR1.4b at end-Jun 2024. A strong pipeline is important to justify the street’s expectation of a 11.1% 3-year EPS CAGR for FY6/23-26.

Although there is no certainty that work orders of high values will be issued in the near term, the O&G sector will likely be supported by the rising oil price environment. Brent spot averaged USD81.92/bbl YTD vs. USD82.14/bbl in 2023. MIBG oil & gas research desk is also Positive on the sector.

At present, there are eight Buys and one Sell on the stock. The mean target price is MYR3.83. At current price, the stock is trading at 9.4x FY24E consensus EPS of 25.6sen, which is lower than its 2-year historical average PER of 13.8x. Dayang has a net cash balance of MYR3.1m as at end-Jun 2024.

News You Can Use

Tuju Setia (TJSETIA MK, CP: MYR0.21, NR) Secured new contract worth MYR317.6m, but execution is key

Tuju Setia announced that its wholly-owned subsidiary Pembinaan Tuju Setia S/B and GPQ S/B (a subsidiary of Terengganu Incorproated S/B) was jointly awarded a MYR317.6m contract to undertake design and build works for Block C of Gleneagles Hospital in Kuala Lumpur.

The latest job win would help to replenish the unbilled order book which stood at MYR842m at end-Jun 2024 (1.4x its FY23 revenue). Although a strong pipeline will contribute to its turnaround, execution is key. Recall that the group was in the red in FY22-23, mainly impacted by higher building material and operating costs.

Stock is trading at a PB of 1x. Meanwhile, the Bursa Malaysia Construction Index trades at a 2024E PB of 1.3x.

IPO Watch: Sorento Capital Berhad

Total Offer: 229m Shares

Price: MYR0.37

Public: 155m

Underwriter: Alliance Islamic Bank

Closing Date: 15 Oct 2024

Listing date: 28 Oct 2024

Crest Group is primarily involved in the distribution of bathroom and kitchen sanitary wares. The group distributes house brands namely ‘Sorento’, ‘Mocha’, ‘Cabana’ and ‘iBorn’, as well as third party brands. In FY6/24, revenue was driven by the following distribution channels: 1) dealers (64.5%); 2) project-based sales (35.1%); and 3) online (0.4%).

The group is raising MYR57.4m which will be used for: 1) branding and promotional marketing (10.5%); 2) expansion of dealer network (10.5%); 3) prepayment of bank borrowings (15.7%); 4) working capital (54.7%); and 5) estimated listing expenses (8.7%).

Based on pro forma financials, Sorento Capital is trading at an historical FY6/24 PER of 13.2x, at its IPO price of MYR0.37.

Source: Maybank Research - 16 Oct 2024