DAYANG (5141) - Dayang only needs another 3.1% of Perdana to trigger GO
April 27, 2015 : 10:16 AM MYT
Perdana Petroleum Bhd
(April 24, RM1.34)
Reiterate buy with an unchanged RM1.70 target price based on unchanged 10 times 2016 price-earnings ratio: Dayang Enterprise exercised early termination notices on Sovereign (a 169-pax workboat) and Odyssey (a 300-pax accommodation work barge) in February and March 2015, by giving one month’s notice. Subsequently, Perdana Petroleum Bhd has secured a charter from Petronas Carigali Sdn Bhd (PCSB) for Sovereign from end-May 2015 and is working to put Odyssey on charter again.
Meanwhile, Dayang Enterprise has raised its stake in Perdana Petroleum to 29.9% (up 1.3%) following the purchase of 11.5 million shares from March 16 to March 18 this year.
Securing a charter for Sovereign within a short window despite being served an early termination notice is positive for Perdana Petroleum. It reflects a demand for brownfield-supporting vessels (work boats, accommodation work barges).
For that, we expect Odyssey to secure a charter soon. The cut in our 2015 net profit forecast by 20% mainly reflects lower earnings from Sovereign/Odyssey on lower operating days (a decline of 50% or 26%) to 180/270 days. Our financial year ending Dec ecember 2016 (FY16) to FY17 forecasts are unchanged.
Dayang Enterprise’s recent moves (i.e. discontinuing firm vessel charters and raising its stake in Perdana) further support the takeover thesis. Dayang Enterprise only requires another 3.1% stake in Perdana Petroleum to trigger a general offer. The free float on this stock is high, which would make such an attempt feasible. — Maybank IB Research, April 24
http://www.theedgemarkets.com
April 27, 2015 : 10:16 AM MYT
Perdana Petroleum Bhd
(April 24, RM1.34)
Reiterate buy with an unchanged RM1.70 target price based on unchanged 10 times 2016 price-earnings ratio: Dayang Enterprise exercised early termination notices on Sovereign (a 169-pax workboat) and Odyssey (a 300-pax accommodation work barge) in February and March 2015, by giving one month’s notice. Subsequently, Perdana Petroleum Bhd has secured a charter from Petronas Carigali Sdn Bhd (PCSB) for Sovereign from end-May 2015 and is working to put Odyssey on charter again.
Meanwhile, Dayang Enterprise has raised its stake in Perdana Petroleum to 29.9% (up 1.3%) following the purchase of 11.5 million shares from March 16 to March 18 this year.
Securing a charter for Sovereign within a short window despite being served an early termination notice is positive for Perdana Petroleum. It reflects a demand for brownfield-supporting vessels (work boats, accommodation work barges).
For that, we expect Odyssey to secure a charter soon. The cut in our 2015 net profit forecast by 20% mainly reflects lower earnings from Sovereign/Odyssey on lower operating days (a decline of 50% or 26%) to 180/270 days. Our financial year ending Dec ecember 2016 (FY16) to FY17 forecasts are unchanged.
Dayang Enterprise’s recent moves (i.e. discontinuing firm vessel charters and raising its stake in Perdana) further support the takeover thesis. Dayang Enterprise only requires another 3.1% stake in Perdana Petroleum to trigger a general offer. The free float on this stock is high, which would make such an attempt feasible. — Maybank IB Research, April 24
http://www.theedgemarkets.com
