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02 July 2024

STOCK NAME : DAYANG ENTERPRISE HOLDINGS (5141)

is an investment holding company. Its subsidiaries are involved in the provision of offshore topside maintenance services, minor fabrication operations, offshore hook-up and commissioning, and charter of marine vessels. Dayang Enterprise Holding Berhad (Dayang), a Sarawak- based oil and gas player, is a major provider of offshore platform services within the oil and gas Industry. Dayang, which can trail its history back to 1980, has four core businesses: Offshore topside maintenance services, Minor fabrication operations, Offshore hook-up and commissioning and Charter of marine vessels relating to the oil and gas industry.

KIM'S TARGET PRICE

• Current Price : RM2.86 (Undervalued)
• TP1 : RM3.30
• TP2 : RM3.50
• Fair Value :  RM3.10
• Kim's TP : RM3.50
• Hot Warrant : DAYANG-C38 (TP 0.20 sen - 0.40 sen)

KIM'S VIEW

OIL & GAS Sector :

• My Top picks are DAYANG.
• Overweight (Bullish remain continues)
• Average Brent oil price forecasts at USD85 per barrel (bbl) for 2024/2025.
• Average Crude oil price forecasts at USD82 per barrel (bbl) for 2024/2025.
• Post monsoon, local offshore activities will run at full throttle and lift topside maintenance contractors.
• Also offshore support vessel fleet owners in the coming quarters.
• DAYANG awaiting and aiming to secure additional work boats and accommodation work barges in preparation for increasing work orders from PETRONAS Carigali Sdn Bhd anticipated to begin by 3Q24.
• DAYANG logged RM27.9 million net profit for 1QFY2024.
• DAYANG earnings prospects are expected to remain solid, underpinned by strong work orders and better vessel utilisation.
• DAYANG is bidding for two contracts worth RM300mil involving engineering, procurement, construction, transportation, installation and hook-up, commissioning services and platform decommissioning.
• Petronas to ramp up brownfield activities, booming maintenance, HUC services in 2024 - 

  The booming upstream topside maintenance and hook-up and commissioning (HUC) services is expected to continue throughout the rest of 2024 as Petroliam Nasional Bhd (Petronas) ramps up its brownfield activities to boost production on its existing fields. One of beneficiary players are DAYANG,

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DAYANG SERVICES

1. Provision of Maintenance Services

Dayang’s subsidiary, Dayang Enterprise Sdn Bhd (DESB) undertakes the overall provision of maintenance services, which focuses on the following areas:

• Maintenance of Topside structure
• Maintenance of pipes and valves and
• Electrical and instrumentation

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The maintenance services are provided either on a routine or scheduled basis or during a breakdown or emergency, in which case maintenance works are undertaken due to fault or failure.

2. Fabrication Operations

Fabrication generally refers to the valued-added process of constructing structures out of various raw materials, primarily metal. Dayang undertakes engineering and fabrication services to meet the needs of its customers including onshore fabrication for products such as pipe and valve systems, skids and other steel structures such as hand rails and helideck extensions.

Dayang currently have Five (5) Fabrication Yards cum Warehouse namely:

• Labuan Fabrication Yard 2 (Jalan Patau-Patau, Labuan F.T)
• Labuan Fabrication Yard 3 (Jalan Patau-Patau, Labuan F.T)
• Labuan Fabrication Yard 4 (Kampung Sungai Bedaun, Labuan F.T)
• Bintulu Fabrication Yard (Kidurong Light Estate, Bintulu, Sarawak)
• Kemaman Yard (Kemaman Supply Base, Terengganu)

3. Hook-up & Commissioning

Dayang also undertakes the provision of hook-up and commissioning for steel structures and electrical and instrumentation services as part of its supporting products and services to the oil and gas industry.

Some of the tasks related to hook-up and commissioning of electrical and instrumentation includes electrical engineering; system design; equipment and system procurement; wiring including laying of new wires and cables; panel installation and wiring; and testing and commissioning.

4. Charter of Marine Vessels

At present, Dayang possesses its own marine vessels which are used to provide offshore accommodation for its personnel as well as work area and equipment to facilitate the provision of its supporting products and services.

Dayang’s subsidiary, DESB Marine Services Sdn Bhd (DMSSB) obtained a Domestic Shipping License from the Domestic Licensing Board in September 2005 that allows the company to provide workboat and floating accommodation services.

Construction of the company’s first vessel, "Dayang Pertama" was completed in April 2005 and till to date still operates under our Topside Structural Maintenance (TSM) Contract . It has a maximum capacity of 189 persons. The vessel provides accommodation, catering services as well as a large work area for its personnel.

To further complement its activities, DMSSB also owns two straight supply vessel called “Dayang Maju” and "Dayang Cempaka" that was commissioned in February 2006 and May 2011 respectively.

The construction of "Dayang Berlian" was completed and delivered in January 2007. Till now we're using this vessel for our Topside Structural Maintenance(TSM) contract with Petronas Carigali Sdn Bhd (PCSB).

Dayang Zamrud, a maintenance and accommodation workboat was completed and delivered in 2009 and is currently hired to Brunei Shell Petroleum Company Sdn. Bhd.

"Dayang Mutiara", the first workboat to comply with the code of safety for Special Purpose Ships (SPS Code) was delivered in February 2012 and is currently used for our Topside Structural Maintenance (TSM) contract with Petronas Carigali Sdn Bhd (PCSB).

"Dayang Opal" was completed and delivered in January 2014 and is currently used for our Hook-Up and Commissioning (HUC) contract with Sarawak Shell Berhad.

"Dayang Ruby" a sister vessel of "Dayang Mutiara" was completed and delivered in February 2015.

Perdana Petroleum Berhad (PPB), a subsidiary of Dayang, owns fifteen (15) vessels consisting of eight (8) Anchor Handling Tug Supply Vessel (AHTS), five (5) accommodation work barges (AWB), and two (2) workboats (WB). It's core business encompass the provision of offshore marine support services for the upstream oil and gas industry.

5. Vessel Technical Specification

• Dayang Opal - Type of Vessel: Maintenance/Work Vessel
• Dayang Cempaka - Type of Vessel: Supply Boat/ Landing Craft
• Dayang Mutiara - Type of Vessel: Maintenance/Work Vessel
• Dayang Zamrud - Type of Vessel: Maintenance/Work Vessel
• Dayang Pertama - Type of Vessel: 75M Maintenance/Work Vessel
• Dayang Maju - Type of Vessel: Supply Boat/Landing Craft
• Dayang Berlian - Type of Vessel: 75M Maintenance/Work Vessel
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