Dayang contract win highlights job delivery capabilities

KUALA LUMPUR: Kenanga research is positive on DAYANG ENTERPRISE HOLDINGS BHD’s recent contract win from Petronas Carigali, which it guesstimates to be worth RM100mil to RM200mil.

It added that the contact could serve as an “interim” contract while a possible retendering of Petronas Carigali’s integrated hook-up and commissioning contract is underway.

“Nonetheless, we are positive on the win as it highlights the company’s job delivery capabilities, thus enabling its clients’ confidence in awarding Dayang work contracts,” it said.

The research house maintained market perform on the counter with an unchanged target price of RM1.45.

In a note, it said it guesstimated the value of the 15-month contract to be in the region of RM100mil to RM200mil although actual contract value would depend on the work orders received.

“We believe the contract would be able to fetch EBIT margins at around the mid-teens region,” it said.

Kenanga expects Dayang’s order book to remain above RM3bil, which would bring its new contract wins year to date to an estimated RM450mil to RM600mil, which is well within its replenishment assumption of RM1bil.

Source: TheStar