KUALA LUMPUR: Dayang Enterprise Holdings Bhd's net profit of RM38.6 million in the first quarter (Q1) of 2024 is in line with expectations, said Public Investment Bank (PublicInvest).
The research house deems the financial result in line with its and consensus estimates, despite only meeting 16 per cent of the full-year forecast, as Q1 is typically the weakest for the year due to unfavourable weather conditions.
"Nevertheless, Dayang still managed to record the best Q1 result in a decade, signaling its growth trajectory is on track," it said in a note.
Meanwhile, PublicInvest said tight offshore support vessel (OSV) supply will continue to underpin elevated daily charter rate (DCR) levels, potentially even continuing to creep up.
To address the situation, it said Petroliam Nasional Bhd's (Petronas) long-term contracts, such as Project Safina 2.0 (7–10 years) and Integrated Logistic Control Tower (ILCT) (3+3 years), encourage more participation from the investment community to finance new vessel orders.
"Dayang, through its subsidiary Perdana Petroleum, would be a forerunner to secure the contracts and expand its fleet," it said.
As for the offshore Topside Maintenance Services (TMS) segment, the firm expects Dayang to secure the new maintenance, construction, and modification (MCM) as well as hook-up and commissioning (HUC) contract to replace the existing contract under extension in the second half of 2024.
"Work order rates should be more sustainable at an estimated value of about RM4-5 billion each, for up to 10 years, including extensions."
The research firm maintains its outperform rating with a higher target price of RM3.75 from RM3.35 on Dayang.