DAYANG (5141) : AllianceDBS Research maintains “Buy” on Dayang, lowers TP to RM3.25
KUALA LUMPUR (Dec 4): AllianceDBS Research has maintained its “Buy” rating on Dayang Enterprise Holdings Bhd at RM2.50 with a lower target price of RM3.25 (from RM3.80), saying the company was continuing its offshore brownfield activity despite lower crude oil prices.
In a note Thursday, the research house said Dayang’s business was unique compared to most other listed oil & gas services providers in Malaysia, as it caters exclusively to the offshore brownfield market.
It said this segment was resilient to volatility in crude oil prices because it relates to the upkeep of existing production facilities.
“Therefore, even in this period of weak crude oil prices, we are retaining our forecast earnings for Dayang. The group’s earnings were also resilient during the 2008-09 financial crisis.
“We cut target price to RM3.25 (13x FY15F EPS) from RM3.80 previously, after downgrading target P/E to 13x from 15x.
"This reflects the O&G mid-cap trough valuation. However, we are retaining our BUY rating for Dayang for the group’s clean balance sheet and resilient earnings profile,” it said.
At 11.13am, Dayang rose 0.8% or two sen to RM2.52 with 678,100 shares traded.
http://www.theedgemarkets.com
KUALA LUMPUR (Dec 4): AllianceDBS Research has maintained its “Buy” rating on Dayang Enterprise Holdings Bhd at RM2.50 with a lower target price of RM3.25 (from RM3.80), saying the company was continuing its offshore brownfield activity despite lower crude oil prices.
In a note Thursday, the research house said Dayang’s business was unique compared to most other listed oil & gas services providers in Malaysia, as it caters exclusively to the offshore brownfield market.
It said this segment was resilient to volatility in crude oil prices because it relates to the upkeep of existing production facilities.
“Therefore, even in this period of weak crude oil prices, we are retaining our forecast earnings for Dayang. The group’s earnings were also resilient during the 2008-09 financial crisis.
“We cut target price to RM3.25 (13x FY15F EPS) from RM3.80 previously, after downgrading target P/E to 13x from 15x.
"This reflects the O&G mid-cap trough valuation. However, we are retaining our BUY rating for Dayang for the group’s clean balance sheet and resilient earnings profile,” it said.
At 11.13am, Dayang rose 0.8% or two sen to RM2.52 with 678,100 shares traded.
http://www.theedgemarkets.com
