Posted by Foresight123 > 2014-02-21 17:16 | Report Abuse

Wokay thx

Posted by matrix6050 > 2014-02-22 00:11 | Report Abuse

One of the stock that I will buy and hold for 2014 :)

Posted by Joel > 2014-02-22 08:03 | Report Abuse

Morning !

Premised on its estimated FY14/15 earnings growth of 86%/18%, Daya
Materials (Daya) remains one of our favourite small-cap oil & gas (O&G)
picks, especially given its growing O&G division. We raise our FY14/15
forecasts by 13%/29% to reflect better profitability for its technical
services (TS) business. Maintain BUY, with a new MYR0.48 FV (from
MYR0.42), pegged to an unchanged 15x target FY14 P/E.

Posted by Joel > 2014-02-22 08:04 | Report Abuse

Time for execution. Daya’s two offshore support construction vessels
(OSCVs) – Siem Daya 1 (SD1) and Siem Daya 2 (SD2) – will officially
begin their North Sea works with Technip Norge AS (Technip Norge) by
end-February. Each vessel will be deployed for a period of 220-250
days/contracted year. We project 230 days for North Sea deployment
and 30 days for spot charters for each vessel.

Posted by Joel > 2014-02-22 08:04 | Report Abuse

51% stake acquisition of SD2 still on track. Daya’s planned
acquisition of a 51% stake in SD2, which will cut related costs by around
25%, is targeted to be completed by 1H14. Our calculations suggest that
the acquisition will bump up FY14/15 earnings estimates by 2-4%/4-8%.

Posted by Joel > 2014-02-22 08:04 | Report Abuse

A third vessel by 4Q14 possible. Daya is negotiating for another
vessel chartering contract with Technip Norge involving a similar vessel
as SD1 and SD2. We believe the third vessel’s contract arrangement
with Siem Offshore (SIOFF NO, NR) could be similar to SD2’s and
ultimately lead to Daya acquiring a 51% stake.

Posted by Joel > 2014-02-22 08:04 | Report Abuse

Management’s careful selection. Daya’s technical services (TS)
division did not fare well in 3Q13 due to lower project profitability
margins. Management said TS showed improvement in 4Q13 and
reaffirmed its more selective stance on future projects

Posted by Joel > 2014-02-22 08:05 | Report Abuse

Maintain BUY, higher MYR0.48 FV. Daya remains one of our favourite
small-cap O&G picks, premised on its FY14/15F earnings growth of
86%/18%, driven by significant contributions from its O&G division. We
revise our FY14/15 forecasts by 13%/29% to reflect better profitability in
its TS business. Maintain BUY, with a new MYR0.48 FV (from
MYR0.42), pegged to an unchanged 15x target FY14 P/E, which is on
par with other small- to mid-cap O&G companies within our coverage
universe.

Posted by Joel > 2014-02-22 08:05 | Report Abuse

Emphasising on project execution

Time for execution.

Both SD1 and SD2 OSCVs will officially begin their North Sea
works – under respective long-term contracts with Technip Norge – by end-February.
Each vessel will be deployed for a 220-250 days/contracted year period, following
SD1’s testimonial 1-month stint with the leading subsea engineering contractor on the
Norwegian continental shelf in Nov 2013.

Briefly on contract terms.

SD1 is on a 5-year charter contract with a 2-year
extension option, while its sister vessel is on a 3-year contract with a 4-year
extension option. Both OSCVs were originally slated for a 100-175 days/year
deployment to the North Sea. However, the terms were changed following Daya’s
successful deployment of SD1 in Nov 2013.

We understand from management that both OSCVs will fetch daily charter rates
(DCR) of USD103,300 with an agreed escalation rate of 3% every year.
Both vessels are chartered from Siem Offshore. Both SD1 and SD2 are currently
being chartered from Siem Offshore for seven years.

This matches Daya’s
commitment to Technip Norge. Both contracts entail a bareboat charter rate of
USD65,300 each plus a similar escalation rate of 3% annually. SD1 and SD2 are
also equipped with two remotely operated vehicles (ROVs) each. A single ROV has a
charter rate of approximately USD10,000/day.

Posted by Joel > 2014-02-22 08:06 | Report Abuse

Assumptions imputed into our earnings forecasts.

We are assuming that each
vessel will be deployed to the North Sea for 230 days and will have an estimated 30
days for spot charters every year. Daya said the OSCVs can fetch a DCR of
USD119,000/day/vessel if contracted on a spot basis. This arrangement implies an
average DCR of USD105,100/day/vessel. Included in our numbers are: i) a total
mobilisation period of 40 days to the two locations, and ii) 65 days of downtime as
guided by management.

What if Technip Norge requires the vessels for 300 days?

According to
management, Technip Norge was negotiating for a longer charter of 300 days. The
weighted average DCR will then be lower, at USD103,300/day/vessel if the OSCVs
are deployed to the North Sea under such an arrangement. This also means that the
SD1 and SD2 will not be able to undertake any spot charter contracts, as we believe
the remaining 65 days/year window is too short for such opportunities

Posted by Joel > 2014-02-22 08:06 | Report Abuse

A combination of spot and long-term charters is, indeed,

more lucrative. It also gives Daya the opportunity to build its track record and
expertise by working with different parties that may have varied job requirements – a
proposition that management prefers.

Yet, we cannot ignore the fact that a longer
locked-in period of 300 days vs 230 days with Technip Norge provides greater
earnings visibility.

It eases the risk that the OSCVs may lie idle longer than expected
in port, which, in turn, can result in operating costs with no matching chartering
revenue.

Posted by Joel > 2014-02-22 08:07 | Report Abuse

51% acquisition stake in SD2 still on track.

The planned acquisition of a 51%
stake in SD2 is targeted for completion by 1H14.
According to management, owning
a 51% stake in a vessel helps to reduce related costs by approximately 25%. Hence,
our calculations suggest that the stake acquisition may bump up FY14 and FY15
earnings estimates by 2-4% and 4-8% respectively.

The initial outright acquisition cost for the SD2 was said to be USD120m but,
with
upgrades done by Siem Offshore to increase the OSCV’s power supply capacity, it
may now cost USD132m.

The 51% stake acquisition will be financed via 25% equity
and 75% debt, and we understand that part of the proceeds from Daya’s recent 10%
placement may be utilised to partly fund the acquisition costs.

Posted by Joel > 2014-02-22 08:08 | Report Abuse

A possible third vessel by 4Q14.

We understood that Daya is negotiating for
another vessel chartering contract with Technip Norge, which will involve a similar
type of vessel to SD1 and SD2.

If successful, this third OSCV will again be chartered
from Siem Offshore and is the latter’s last vessel built to this specification.

We believe
the contract arrangement for the third OSCV could be somewhat similar to SD2’s and
may ultimately lead to Daya acquiring a 51% stake.

Although nothing has been
confirmed at this current juncture, management said that any further acquisition could
be funded via a combination of rights issuance and bonds.

Posted by Joel > 2014-02-22 08:08 | Report Abuse

Refining its craft.

Daya’s 3Q13 results came out weaker than expected.

This was
largely due to higher operational costs and effective tax rate on tax-related nondeductible
expenses.

Going forward, we believe these costs will be more
manageable as management becomes more familiar with the O&G industry.

We
understand that Daya has also been exploring different avenues to effectively
minimise taxation costs.

Pending management’s guidance, we conservatively
assume a corporate tax rate of 24% in FY14/15 across the group.

Posted by Joel > 2014-02-22 08:09 | Report Abuse

Daya’s careful selection.
The group’s second-largest contributor, the TS division,

did not fare well in 3Q13 as it was dogged mainly by lower project profitability
margins.
This business historically records PBT margins between 4-11% but this
deteriorated sharply to approximately 3% in both 2Q13 and 3Q13.

Management said
TS did show improvement in 4Q13 and reaffirms its stance to be more selective on
future projects that it undertakes.

Although we are comforted by Daya’s commitment, we still cautiously assume a
conservative 6% PBT margin to this division throughout FY14-15.

The group’s
orderbook currently stands at approximately MYR1bn and we expect these existing
projects to continue until FY16.

( Latest : DAYA's current order books stand at RM2.1 bil )

Posted by Joel > 2014-02-22 08:10 | Report Abuse

Daya CMT SB offers design, engineering, construction, project management and maintenance services for commercial and industrial buildings under the TS division.

Daya Clarimax SB, on the other hand, provides:
i) ISO tank cleaning, repair and maintenance (R&M) services;
ii) waste solvents recycling; and
iii) the manufacturing of high purity electronics and technical solvents

Posted by Joel > 2014-02-22 08:11 | Report Abuse

Valuations
Still one of our O&G Top Picks in the small-cap segment.

Daya is still one of our favourite picks in the small-cap O&G space, as we believe its growth

potential remains tremendous. The estimated 86.4%/17.7% growth in FY14/FY15 earnings is

largely due to the more significant contributions stemming from its subsea O&G division.

We are also looking forward to a better performance from the group’s TS business in FY14

after consecutive letdowns in 2Q13 and 3Q13. However, we cautiously expect an improved PBT margin of 6% for this division in FY14.

Possible upside in earnings going forward.

Considering that management is still exploring different ways to minimise taxation costs,

we conservatively assume an effective tax rate of 24% across the board in FY14 and FY15.

Maintain BUY with new FV of MYR0.48 (from MYR0.42).

We maintain our BUY call on the stock with a new FV of MYR0.48 on an unchanged 15x target FY14 P/E.

This is largely on par with other small- to mid-cap O&G companies within our coverage universe

Posted by stockinvester > 2014-02-22 08:12 | Report Abuse

Thank you, joel for your hardwork.

Posted by Joel > 2014-02-22 08:16 | Report Abuse

BELOW ARE Industry consolidation related DAYA (fr RHB also)


We also view Daya Materials (DAYA MK,

BUY, TP: MYR0.42), an emerging offshore & onshore O&G player, as a potential

takeover target. The group, which is riding high on its partnership with Siem Offshore

(SIOFF NO, NR) is still growing its geographical footprint since becoming Malaysia’s

first subsea services provider in the North Sea.

Posted by tewnama > 2014-02-22 08:20 | Report Abuse

Kenapa guna "We" ?

Posted by davors > 2014-02-22 08:25 | Report Abuse

Dia copy paste from RHB analyst la bro.
RHB yg pakai "We"

Posted by newbirds > 2014-02-22 09:41 | Report Abuse

Thank u Joel.

Posted by newbie91 > 2014-02-22 11:14 | Report Abuse

I thought the report should be confidential before it released to the public..

Posted by Joel > 2014-02-22 11:16 | Report Abuse

I copy & paste fr RHB, sorry lo I adit "we" to "RHB" next time.

Posted by selamba > 2014-02-22 12:23 | Report Abuse

mcm x daya nak naik jer........juaallll

Posted by Mohammad Firdaus Juhari > 2014-02-22 12:27 | Report Abuse

thanks Joel for the insight.

Posted by valueinvestor > 2014-02-22 12:36 | Report Abuse

http://dayagroup.com.my/wp-content/uploads/2014/02/RHB-Report-Feb2014.pdf

Posted by wanshare > 2014-02-22 13:57 | Report Abuse

Thanks a lot to Joel and valueinvester.

Posted by Foresight123 > 2014-02-22 14:03 | Report Abuse

Thx joel

Posted by Foresight123 > 2014-02-23 15:11 | Report Abuse

Time to go up tmrw

Posted by countfind > 2014-02-23 15:31 | Report Abuse

not yet...but who knows

Posted by Jerry > 2014-02-23 16:49 | Report Abuse

crucial week for daya, if we see daya goes up these few days, we can expect an outstanding quarter report or else... Tressury shares sold, and the consideration is recorded in other income?

Posted by Alex Chan > 2014-02-23 22:36 | Report Abuse

treasury shares sold indicates overpriced

Posted by newbirds > 2014-02-23 22:40 | Report Abuse

Alex how T share. Is overprice. Pls explain.

Posted by newbie91 > 2014-02-23 23:09 | Report Abuse

Treasury share sold is to support its working capital as well as the acquisition of siem daya 2

Posted by calvintaneng > 2014-02-23 23:13 | Report Abuse

Treasury shares sold not to the open market but to Directors is actually a good sign. Warren Buffet likes Directors who buy back own Company shares/

Posted by UnicORn > 2014-02-24 00:08 | Report Abuse

buy, keep or sell?

Posted by harmizul > 2014-02-24 00:17 | Report Abuse

When the financial report release?

Posted by Foresight123 > 2014-02-24 01:20 | Report Abuse

Should be out this week

Posted by HolyBullRun > 2014-02-24 09:25 | Report Abuse

Received from fren.
Daya - 4Q13 results on 26 Feb. Expected FY13 PAT RM25-27m which is about 25% growth from FYn12.

Posted by sunflower > 2014-02-24 09:45 | Report Abuse

@Holybullrun, your fren is a staff of daya?

Posted by HolyBullRun > 2014-02-24 10:10 | Report Abuse

@sunflower..no..from a broker who serve my fren's co..guys..good to buy..today top volume..strong!

Posted by HolyBullRun > 2014-02-24 10:58 | Report Abuse

when wednesday result out..for sure fly higher..grab some cheap tickets now..

Posted by stockinvester > 2014-02-24 11:04 | Report Abuse

Huge volume but small increase

Posted by kytan > 2014-02-24 11:18 | Report Abuse

this week will fly, buy now and wait for report...one day before report out sure fly..afterreport out..maybe contra take profit again.

Posted by Foresight123 > 2014-02-24 13:20 | Report Abuse

So slow :/

Posted by weijian > 2014-02-24 13:21 | Report Abuse

Should grab now....

Posted by kytan > 2014-02-24 15:19 | Report Abuse

strong support..again.

Posted by kytan > 2014-02-24 15:20 | Report Abuse

going North.. if today can fly high..maybe report will out tonight..

Posted by member41 > 2014-02-24 15:22 | Report Abuse

Finally 445... thank the guys who buy the 138 lots...