KUALA LUMPUR: Public Investment Bank research (PublicInvest research) has raised Dayang Enterprise Holdings Bhd's earnings forecast and target price for financial year 2024 (FY24) on the strength of its first contract win for the year.
The firm has attached a higher target price of RM2.50, from RM2.25 previously, to Dayang Enterprise's share price and increased earning forecasts for FY24 and FY25 by 11.1 per cent and 12.3 per cent respectively.
Dayang Enterprise yesterday announced that it won a three-year contract from Petronas Carigali for rectification works and associated services for Asset Integrity Findings (AIF), Package A, Sarawak Oil Asset.
The contract runs from December 2023 to December 2026 and is estimated to be worth RM1.2 billion, boosting Dayang Enterprise's orderbook to RM2.15 billion.
"As mentioned earlier, Dayang Enterprise was the frontrunner to secure the AIF as the group was selected to undergo job scoping for six months in the second half of 2023. The value is slightly lower than expected however," PublicInvest said in its note.
The firm said Dayang Enterprise is in the midst of submitting tenders for its five-accommodation workboats (AWB).
"We believe it could secure the tender with a slightly higher daily charter rate (DCR) than the previous contract due to the shortage of Malaysian-flagged offshore support vessels (OSV)," it said.
Some operators are charter-in foreign-flagged OSVs with cost-plus mark-ups to meet local demand.
In Petronas Activity Outlook 2024-2026, there is an increase of AWB requirements from 48 to 55 on year-on-year basis in 2024.
Petronas also highlighted that the group is optimising vessel utilization by centralised direct chartering, which enables it to assign a vessel towards multiple projects, resulting in better utilisation rate.
