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Refer to important disclosures at the end of this report
BUYBUYBUYBUY RMRMRMRM3.693.693.693.69 KLCIKLCIKLCIKLCI ::::
1,870.991,870.991,870.991,870.99PricePricePricePrice Target :Target
:Target :Target :12-Month RM4.55 (Prev RM4.55)
Shariah Compliant :Shariah Compliant :Shariah Compliant :Shariah
Compliant : Yes
AnalystArhnue TAN+603 2604 [email protected]
Result Summary
FYFYFYFY DecDecDecDec ((((RMRMRMRM m)m)m)m)
2Q2Q2Q2Q2014201420142014
2Q2Q2Q2Q2013201320132013
1Q1Q1Q1Q2014201420142014
yoyyoyyoyyoy%%%% chgchgchgchg
qqqqoqoqoqoq%%%% chgchgchgchg
P&L ItemsP&L ItemsP&L ItemsP&L Items
Turnover 221.7 111.6 177.4 98.7 25.0Gross Profit 84.3 53.2 59.6
58.6 41.6
Opg Profit 61.9 38.0 39.1 63.2 58.6
EBITDA 80.2 41.4 54.6 93.6 46.7
Net Profit 54.6 35.3 34.7 54.9 57.3
Other DataOther DataOther DataOther Data
Gross Margin (%) 38.0 47.7 33.6
Opg Margin (%) 27.9 34.0 22.0
Net Margin (%) 24.6 31.6 19.6
Financial SummaryFYFYFYFY DecDecDecDec ((((RMRMRMRM m)m)m)m)
2013201320132013AAAA 2014201420142014FFFF 2015201520152015FFFF
2016201620162016FFFFTurnover 553 1,164 1,222 1,222
Operating Profit 128 214 228 239
EBITDA 168 290 312 326Net Pft (Pre Ex.) 116 191 209 224
EPS (sen) 18.1 23.2 25.3 27.2
EPS Pre Ex. (sen) 14.1 23.2 25.3 27.2
EPS Gth (%) 46 28 9 7
EPS Gth Pre Ex (%) 14 64 9 7
Net DPS (sen) 6.8 7.0 7.0 7.0
BV Per Share (sen) 80.8 97.0 115.3 135.5PE (X) 20.4 15.9 14.6
13.6
PE Pre Ex. (X) 26.1 15.9 14.6 13.6
EV/EBITDA (X) 18.3 10.3 9.2 8.4
Net Div Yield (%) 1.9 1.9 1.9 1.9
P/Book Value (X) 4.6 3.8 3.2 2.7
Net Debt/Equity (X) 0.0 CASH CASH CASH
ROAE (%) 23.6 26.1 23.9 21.7
At A GlanceIssued Capital (m shrs) 825Mkt. Cap (RMm/US$m) 3,043
/ 964
Avg. Daily Vol.(000) 943
Price Relative
Source: Company, AllianceDBS
83
133
183
233
283
333
0.8
1.3
1.8
2.3
2.8
3.3
3.8
Aug-10 Aug-11 Aug-12 Aug-13 Aug-14
Relative IndexRM
Dayang Enterprise Holdings (LHS) Relative KLCI INDEX (RHS)
MalaysiaMalaysiaMalaysiaMalaysia EquityEquityEquityEquity
ResearchResearchResearchResearch 25 Aug 2014
Result Snapshot
Dayang EnterprisesBloomberg: DEHB MK EQUITY|Reuters: DEHB.KL
Refer to important disclosures at the end of this report
Earnings picking up pace Within our and consensus estimates
RM4.7bn orderbook provides excellent earnings visibility
Potential earnings upside from new EPCC contracts
Maintain BUY, TP RM4.55
Highlights
Within expectations. Dayang Enterprises (Dayang) 1H14 net
profit
was c.43% of our and consensus estimates. Earnings considered
to
be within expectations as we expect a stronger 2H.
Hook-up and commissioning works kick in. Dayang turned in
strong net profit growth of 55% y-o-y and 57% q-o-q. This
was
driven by increased work orders under the Sarawak Shell &
Sabah
Shell hook-up and commissioning (Shell HUC) contract which has
an
estimated value of RM2.4bn. Margins however, declined y-o-y
as
works carried out during the quarter had lower margins.
Our View
Earnings to pick up with RM4.7bn orderbook.... We expect
Dayangs earnings to pick up as the year progresses due to
higher
revenue recognition from the Shell HUC contract. The group
hasanother HUC contract from Petronas Carigali (PMO HUC) worth
RM1.3bn which has been progressing slowly. That said, after
roughly
6 months of delays, progress on the contract will pick up in
4Q14
and be in fully swing by 1Q15. In addition to these contracts,
Dayang
disclosed that it has received additional work orders from
Petronas
Carigali worth RM570m in 3Q and this will help further secure
2H14
and FY15 earnings.
Next step - EPCC? Dayangs outstanding orderbook is modest at
RM400m, largely made up of engineering, procurement,
construction
and commissioning (EPCC) works for the Baronia field. The group
is
competing for more jobs with other fabricators and expects
the
contracts to be awarded by September 2014. If successful, this
could
be a new growth area for the group. The group has a
fabrication
license from Petronas (albeit not as a main fabricator) and
has
recently increased its fabrication capacity in Labuan on
expectations
of entering the sub-contractor fabrication market.
Recommendation
Maintain BUY, TP RM4.55....We continue to like Dayang for its
steady
earnings delivery and clean balance sheet. Our TP of RM4.55 is
based
on FY15F 18x PE. Earnings surprises could be on the cards if
the
group secures EPCC contracts.
8/11/2019 DEHB - 140825 - 2Q14 - ADBS
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Page 2
Result Snapshot
Dayang Enterprises
Target Price & Ratings History
Source: AllianceDBS
Order Book
Contract DetailsContract DetailsContract DetailsContract Details
OriginalOriginalOriginalOriginalContractContractContractContractValue
(RMm)Value (RMm)Value (RMm)Value (RMm)
OutstandingOutstandingOutstandingOutstanding(RMm)(RMm)(RMm)(RMm)
AdditionalAdditionalAdditionalAdditionalFarm inFarm inFarm
inFarm in(RMm)(RMm)(RMm)(RMm)
TimelineTimelineTimelineTimeline
2014201420142014 2015201520152015 2016201620162016
2017201720172017 2018201820182018
Petronas Carigali TMS* 802 180 480 Ends Feb-16
Brunei Shell Vessel Charter 70 65
Sarawak/Sabah Shell TMS 400 60 Ext tillMar-16Talisman TMS 125 10
Ends
Oct-15Murphy Sarawak HUC* 314 300
Sarawak/Sabah Shell HUC 2,400 2,200
Petronas Carigali HUC 1,300 1,270 90
JX Nippon HUC 100 80
TOTALTOTALTOTALTOTAL 4,1654,1654,1654,165
TOTAL Incl Farm InTOTAL Incl Farm InTOTAL Incl Farm InTOTAL Incl
Farm In 4,7354,7354,7354,735
* TMS Topside Maintenance Services, HUC Hook-up and
Commissioning
Source: Company, AllianceDBS
S.No.S.No.S.No.S.No. Da
teDateDateDateClosingClosingClosingClosing
PricePricePricePrice
TargetTargetTargetTarget
PricePr icePricePr iceRat ingRat ingRat ingRat ing
1: 27 Aug 13 2.97 3.93 Buy2: 27 Nov 13 3.51 3.93 Buy
3: 27 Feb 14 3.58 4.55 Buy
4: 11 Mar 14 3.79 4.55 Buy
5: 26 May 14 3.45 4.55 Buy
6: 10 Jun 14 3.59 4.55 Buy
Note Note Note No te : Share price and Target price are adjusted
for corporate actions.
1
2
3
4
5
6
2.79
2.99
3.19
3.39
3.59
3.79
3.99
Aug-13 Dec-13 Apr-14 Aug-14
RMRMRMRM
