KUALA LUMPUR: Dayang Enterprise Holdings Bhd's strong performance is expected to continue in 2023, backed by improved job orders from regional oil majors amidst elevated oil prices.
Hong Leong Investment Bank Bhd (HLIB Research) believes these factors will support the company's performance.
The firm also said that improved job contract values and projected blended vessel utilisation and daily charter rates (DCR) for both Dayang and Perdana Petroleum Bhd in the financial year 2023 (FY23) would support this.
"We believe that 2023 will be a golden year for the oil and gas (O&G) service providers—a laggard theme to the elevated oil price environment for the past year," it said.
Dayang recently bagged a contract to provide an accommodation workboat from Petronas Carigali.
HLIB Research notes that this is Dayang's fifth contract win year-to-date (YTD).
"We are slightly positive about this job win. However, we highlight that no contract value is disclosed, but we estimate the DCR to range between RM80,000-RM90,000 per day," it said.
HLIB Research has maintained its earnings estimation for Dayang as it falls within the research firm's job win and utilisation rate assumptions.
"We maintain our Buy recommendation with an unchanged target price of RM1.87, which is in line with the multiple ascribed to all of the oil and gas, services, and equipment providers under our coverage," it added.