Kcc, thank you for posting this article stressing the importance of FCF beside looking at PE . This is one of the key fundamentals in stock evaluation. In fact the stock guru ColdEye rank FCF higher than DY and ROE in his 5 major criteria in stock selection. I also like your article on the 8 wonder of the world and the power of 72 highliting plus teaching many novices the maths in wealth accumulation.

There were many unequal treaties China was forced to sign more than 100 years ago especially by the Japanese,british and the French when China.was weak. China will not.bow to any pressures now.

2015 has lowest oil prices but dayang is profitable. only 2017 incurred paper lost due to impairment of perdana. 2017 generated 221 million cash despite paper lost

2015 has lowest oil prices but dayang is profitable. only 2017 incurred paper lost due to impairment of perdana. 2017 generated 221 million cash despite paper lost

If today close above 1.50 with high volume, then dayang market already consider breakout from the triangle . Even if it doesnt and start to reverse ,the next support will be higher than the previous 1.34 .It appear that the bulls will be winning.over the exhausted bear .

Revenue from Turkmenistan may start to come in as well. There is no monsoon in Turkmenistan as their oil field is on land. The annual report also stated that there were 133 millions renenue not recognised in 2018 but will be booked in 2019.The exceptional lump sum orders will spill over to Q1 as well .It looks like this coming Q1 Result will be much better than the corresponding period and another record qtr.

I recd a circular on May AGM. One of the agenda is proposing a 10%
share buy back.The management must have felt that the current share prices are too low. Hence,getting.approval to buy back.

I recd a circular on May AGM. One of the agenda is proposing a 10%
share buy back.The management must have felt that the current share prices are too low. Hence,getting.approval to buy back.

Yes. great news. Catalyst for upward breakout. The contract is for a period of 5 years. It looks like another lump sum based on work orders which will e issued as and when is needed.

it looks like the triangle is a symmetrical with lower and lower peaks while the lows or supports are getting higher from 1.26,1.29 and 1.34. The next peak will be lower than 1.49 snd next support higher than 1.34 before breakout. The bulls may be winning finally in these few rounds of tussle .

whether it is a descending or symmetrical triangle depends on the price movements for the next few days. If the next trough is above 1.30 ,the triangle could be symmetrical i.e the highs getting lower and the lows getting.higher

Brent Oil already hit US 75 per.barrel

I have also just browsed through Dayang's 2018 Annual report . The 2018 was a record year in terms of Revenue and profitability. The Chairman attribute the Dayang and Perdana 's synergy which made Dayang in a much more competitive position . He is very confident and optimistic Dayang can repeat 2018 result in 2019 premised on its 3 Billion order book which can last for the next 3 years .He is also very confident that the balance sheet will be improved further with its about 300 million per year nett cash generation. He repeatedly mentioned the synergy of Dayang with its subsidiary Perdana will enable Dayang to move forward with greater competitive advantage .

I just read a report by AmInvest upgrading the tgt price of SERBADK to RM 6.50 by giving a PE of 20x of 2019 projected earning. I tried to compare Dayang with Serbadk in terms of profit margin, revenue growth , cash generation,loan and borrowings , I do not find Serbadk very much superior than Dayang except probably its ability to get renewed and repeated orders . Dayang 's profit margin and cash generation are much better than Serbadk while the growth rate for 2018 and 2019 could be the same .THe net borrowing for both companies are almost the same at about 1.1 billions. Serbadk is going for a sukuk roadshow raising fund to finance its borrowing. THis is seen as "positive" by analysts while Dayang's RM 1.06 billion loan is seen as negative despite its ability to repay RM 700 million for the last 3 years . I feel that Dayang was unreasonably " punished " by not even accorded a PE of 6x of 2019 projected earnings when its target price was between RM 1.15 to 1.30 only .

volume already hit 10 million shares in less than one hr

Technical analysis from The star showed bullish trend . The next resistance is 1.60. If it break this resistance, the uptrend will continue to the.next resistance at 1.75.The analysis is also in klse screener

Those who bought iwcity,ekovest yesterday based on pure speculation is.licking their wounds today. Bandar Malaysia is still onthe drawing boards .It will take years for the companies whch benefitted fom the revival to make money. Dayang has proven records of last 3 qtr results plus solid 3 billions order book . With rising trend of crude oil prices ,dayang is a much much better counter to invest compared with ekovest and iwcity.

B4b4,you could be right.With more rigs re opened and re commissioned,we expect Q1 2019 scheduled rates to be higher than Q1 2018. I m just being conservative.

Q1 result is one month away. To predict this result,we need to look at the revenues for scheduled rates,lump sum and.vessel charter respectively for 2017 and 2018 of corresponding Q1. The Q1 2017 and 2018 revenues are as follows respectively.
2018 2017
schedule rates 126 m 97m
lump sum 12 m 8m
vessel charter 11 m 12 m

We expect the coming Q1 to have similar schedule rate revenue as Q1 2018 plus the missing Q4 schedule rate which eill be booked in coming Q1.The total will be about 250 m.Assuming the lump sum to be just half of Q4 of 256 m,it is 128 m.The vessel charter is estimated to be just 20m,the overall total revenue is estimated to be 250+128+20 m =398m.

Dayang own 60% of perdana. Perdana has a total of 778million shares. Assuming Perdana announce right issues of one for every 2 shares at rm 0.40 per shares, dayang will need to come up with RM 93 million to subscribe for its 467 million perdana shares . With an average of RM 280 million nett cash generated per year from the last 3 years, Dayang has no problem subscribing. With the addtional 223 million perdana shares own by dayang through the right issues, dayang can reward its share holders with perdana shares as dividend with 1 out of 5 of dayang shares. Dayang had in fact did that in 2017 by giving 0.302 perdana shares to every one dayang share held. Perdana will be in.a very good financial position after the RI with more than rm 150 million cash injected. With the oil and gas industry turning.around , i dont mind receive perdana shares as dividend instead of cash.

latest news. Sarawak oil and gas players set to gain under Petros. Serbadk ,dayang and Penergy are named the key beneficiaries.

Probability , you are welcomed . My input and analysis was bit and pieces although it contains most of the facts like schedule rates , lump sum ,cash flow , it is Davidtslim who put them together such that it is easier to comprehend when the facts were tabulated systematically.

Two key factors prompted him to do this . Oil prices are trending up and David's analysis ?

Special thanks to David's Analysis of Dayang . I think his analysis with facts and figures leaves very little doubts on his valuations of Dayang .
Even with huge discounts in terms of PE and Future Cash Flow , the valuations by both methods show Dayang worth of more than RM 2 . When Q1 result show our assumption is correct , Dayang will fly further . I hope more readers can critique his analysis and open up a constructive and lively debate on the assumptions .

At the end of the day, the fundamentals will determine the prices。More investors including the IBs are convinced that dayang has good fundamentals in terms of cash flow, PE, orderbook and management capability and confidence.

wow.within less than 30 mins ,30 millions shares transacted between 1.42 to 1.45. strong support.

YiStock, in my opinion, the Negative Revenue for Schedule rate in Q4 2018 was not due to over provision in previous qtrs . The schedule rate revenues for 2018 were 124M , 120M , 127 M and -29 M respectively for the 4 qtrs while for 2017 , they were 97 M, 113M , 75M and 60 M respectively . You can see that the first 3 qtr revenues of 2018 were about 120 M per qtr . It was abnormal and unusual that Q4 has no revenue of schedule rate at all . Even in 2017 , minimum schedule rate revenue was 60 M in Q4 . Even without this revenue ,Dayang already made record profit due to exceptionally high revenue from the lump sum revenue of 269 million. THe management has over met the target . Hence , I suspect they invoice the schedule rate revenue of Q4 into Q1 2019 which was usually the low season . This will " smoothen " the linearity of revenues by qtr.

A key point to note is that despite the facts that the oil prices for 2016 and 2017 averaging US 50 per barrel, Dayang is still able to generate an average nett cash of about rm 280 M per year. With 2019 oil prices above 65, we can expect more old oil rigs will be refurbish, recommission and re operational .Hence more jobs will be awarded to dayang. More jobs means more lump sum order, more schedule rates and more marine vessel charters.

Dayang generated 293 million nett cash in 2018. It has also been able to reduce its borrowing by 700 millions in the last 3 years 。All the analysts who cover Dayang upgraded 2019 earnings by about 25 % premised on the 3 billions orderbook. As indicated in last qtr prospects, dayang management is optimistic and confident that the 2018 2nd half performance is sustainable。The management also stated that it will further improve its balance sheet. With the oil price hitting US 70 per barrel,I m optimistic with Dayang 2019 financial performance barring any unforseen circumstances

yes ,probability. As what Confucious said, DO not do unto others what you do not wish others do unto you. 己所勿欲,勿施於人.

choivo ,it will be more constructive if you can objectively point out which parts of David analysis or assumptions are incorrect factually rather than asking a very subjective question on how accurate is his prediction. We will appreciate your comments if you can critique his analysis objectively. We will appreciate more if you can come out with your versions of analysis and prediction.

please read the latest report from Davidtslim on his analysis of Dayang .
Besides his detail analysis of Dayang financials on gross margin , track records ,cash flow , valuations using both PE and DCF , he has also picked up the key question on lump sum and schedule rate estimation for Q1 which I had described in my previous comment . He , myself and probability are in line with our thinking that the last qtr " missing schedule rate " revenue will most likely be booked in Q1 . This will make Q1 to have double schedule rate revenue which may worth about 250 million . TOgether with other revenue from lump sum and marine vessel charter , Q1 revenue may be another record of more than RM 300 million. Although I disagree with the low PE of 7 to 8 accorded to Dayang , I do agree with his EPS estimation of 26 s next year . With PE of 10 , Dayang should be valued at RM 2.60 . His DCF valuation of RM 2.21 is assuming 10 year cash generated . I would prefer to use 15 years because of Dayang's more than 10 years solid track record . THe additional 5 years cash generated and discounted to present value will make Dayang worth RM 2.60 .

David , good write up .In my opinion, your valuations of Dayang is better than the 3 IBs . Your report cover more details with factual figures than the IBs. You have also consider the outlook of Dayang in longer term rather than just the IB's " next qtr earning is not sustainable " . I am happy that you have also pick up the last qtr "missing " schedule rate revenue which is estimated to be about RM 120 million which in my opinion will be booked in Q1 2019 . In the last 2 weeks , I have commented in bit and pieces in the i3 forum about the missing schedule revenue , the great cash flow of dayang and the brief valuations of dayang using both PE and DCF . I am glad that you have been able to put in nicely in a your write up so that most of the i3 readers can comprehend .

Post removed.Why?

Asia and Europe are all green.except Bursa which lost 14 points

It is important to note that even the last five years which faced severed oil prices downturn , Dayang is still able to generate an average of 280 million cash from its operation , it speaks volume of Dayang's business margins and not too dependent on oil prices .It is a rare gem for a business with less than a billion revenue and yet can generate such a high RM 280 million cash per year . With 964 million shares of Dayang , the average cash generated per year per share is about 29 sen even though the eps stated is less than 20 sen for the last 5 years .

As I mentioned in my earlier comment a few days ago , Dayang is a growing company in terms of revenue , earnings and cash flow . Some diagree using PE as a simple way to value Dayang . Let's use Discounted Cash Flow method . Dayang nett cash generated from Operating Activities from the last 5 years were 297 million, 221 m, 382 m , 325 m ,177 m for 2018. THe average cash generated from these 5 years was 280 million. Let's assume the average cash generated per year in future is 300 million flat per year without growth , the DCF per share is more than RM 2.50 assuming the discounted rate is 10 % using the formula CF/r x {1-1/(r+1)power n } where CF is nett cash generated per year , r is discounted rate , n is the number of years taken into consideration . THe terminal value is assumed to be zero .

It is just too glaring an unprofessional job when within a day , Public Invest change SCGM from buy with tgt price of RM 1.39 to downgrade to 1.05 tgt price . Can we still trust the IB's recommendations ? It is an obvious substandard report of no value .

If Kenanga felt that the Q4 result cannot be sustained , why upgrade the target price ? Why Kenanga only focus on Q4 result and upcoming Q1 19 rather than the whole of 2018 and the whole of 2019 outlook ? The Q3 2018 revenue is almost the same as Q4 revenue . If Q4 revenue which consist of only lump sum revenue without the normal schedule rates , what about Q3 revenue which consist of both normal schedule rates of 127 million plus lump sum of 111 millions . Is this Q3 revenue which is " normal " sustainable ? IF Kenanga feel that Q1 2019 will have a more normalised revenue , then they should expect a RM 127 million schedule rate revenue in Q1 plus may be half of Q4 RM 269 million ( fair estimate ) lump sum . With such normalised revenues respectively , its Q1 total revenue will still be more than 300 million assuming the other marine charter revenue to be 50 million . Kenanga only state that the Q4 lump sum revenue is not sustainable , it did not mention the schedule rate and marine charter revenue is not sustainable . The way kenanga summarise its report give many an impression that Q1 2019 revenue will be much worsed than Q4 2018 without articulating why Q4 has zero schedule rate revenue which is abnormal and also assume that Q1 will also have zero schedule rate revenue which is totally abnormal and illogical .

strong rebound with huge volume of more than 20 million shares within 15 mins. good sign

Facts dont lie . When you look at the financials of Dayang for the last 10 years , it has delivered outstanding growth in both revenue , earnings and cash flows . The revenue has grown to more than 4x from about 200 millions to the current 937 millions , earning has grown 3.5x from 45 millions to 160 millions while nett cash generated from operations has grown 6x from about 50 million to about 300 million. Dayang businees is profitable every year despite the sharp downturn in oil prices in the last 4 years . If we do a logical extrapolation into the next 5 years , we should expect similar growth when we are at the beginning of oil recovery . The strong order book of RM 3.0 billions which can last Dayang till 2023 plus a fraction of the 20 billion in tender book will provide the support to this growth .

teoct , I do not know how Perdana will restructure its debt . Based on Dayang 's report, Perdana will go for private placement . Do not know who will be the takers.

Some argued that the lump sum orders in 2018 is not sustainable . Let me share with you the lump sum revenues for 2017 and 2018 which were 251 millions and 473 millions respectively .Let's take an average of these 2 years .The number is 362 millions. THe schedule rates revenue for 2017 and 2018 were 345 millions and 371 millions (total Q1,Q2 and Q3 revenues assuming Q4 is zero ) . With the Marine Charter and other business estimated to be 160 million in 2019 , a conservative estimate of 2019 revenue is 362 + 371 +160 = 893 millions . This is assuming the schedule rate revenue in Q4 2018 is zero which is very unlikely.

I am optimistic of Dayang 2019 earnings based on the Optimism from Dayang management in their Q4 Prospects and also Hong Leong's Analyst upgrade of 26 % earnings in 2019 . Key Words in the Q4 prospects .

1. Management Optimistic of future earnings
2. Performance is sustainable
3. Strong orderbook of 3 billion lasting till 2023
4. Will improve balance sheet
5. Will go back to the glorious days

Key Words in HL Report

1. More lump sum orders will be issued in 2019
2. Some VO's job completed in 4 and costs accounted for but profits will be booked in 1H2019 pending clients approval.
3. Earnings in 2019/2020 upgraded 26 % and 15 % .

The 2018 's eps is 17 sen . With 26 % upgrade by HL , we expect 2019 earning to be 21.4 sen . My personal estimate is 7 sen per qtr which translate to 28 sen for 2019 .

OMG, 滿江红

For medium and longer term investment , we have to put emotion aside . Be objective and look at factual data so that a good judgement can be made.
As for Dayang , analyse the factual data from the financial reports and read the prospects of the company as stated by the management. THe Dayang management is proud to deliver the exceptionally good result of last qtr and very Optimistic that the performance is Sustainable . If you compare Q3 with Q4 2018 result , the revenue is almost the same but Q4 profit is double the Q3 .In actual fact , there is a 19 million impairment loss in Q3 which was reversed in Q4 . THis 19 million is equivalent to 2 sen per share . IF you take out this impairment loss in Q3 and gain in Q4 , the eps for Q3 is 7 sen while Q4 is 8 sen . Kenanga report stated that Q4 result is not sustainable because its revenue come solely from lump sum order , what about Q3 revenue which is "normalised " because it has the usual or normal scheduled rates revenue plus lump sum? It should sustainable according to Kenanga's " logic " and this will be reproduced and repeatable in Q1 2019 . That means we expect at least a 7s eps in Q1 2019 . This will produce a 26 s total eps for rolling 4 qtrs . This
"deduction" is strictly based on Kenanga's "logic and conclusion" although I feel that Q1 will have better " normalised " revenue based on Hong Leong report in the last paragraph . Some completed VO 's profit will be captured in Q1 2019.

Since the missing scheduled rates revenue were completely missing in last qtr financial , I urge those who know how to access into the financial reports of Dayang and tabulate the quarterly data of this revenue breakdown for both 2017 and 2018 . It can be found in section A 11 of the
financial reports under the heading Disaggregation of REvenue . For the 8 qtrs , even in 2017 , there is one qtr with at least 60 million revenue . Ask yourself , is it logical to assume that last qtr ( Q4 2018 ) has negative revenue when all the previous 3 qtrs in 2018 has more than 120 millions respectively ?

The fatal statement and conclusion from Kenanga was that the last Qtr ( Q4 2018) earning was not sustainable because its revenue does not come from the normal " scheduled rates " but depend entirely from lump sum revenue which was exceptionally high in that qtr . Why there isnt any such revenue at all but a negative 29 million instead . As I tabulated in my yesterday postings , the last 8 qtrs scheduled rates revenue from Q1 2017 till Q4 2018 were 97 m, 113 m , 75 m 60 m and 124 m , 120 m ,127 m and (-29 m) . How come Q4 2018 do not have such revenue which is supposed to be a scheduled maintenance revenue . Isnt it strange ? IF I were Kenanga , I would have posted this question to the management rather than assume that there is zero revenue ? Is it logical to assume that there is no scheduled maintainance only for this qtr when every qtr had such revenue? Is it a negligence , forget to ask , intentionally omit this . I strongly suspected the revenue will be booked in Q1 although the maintainance work has been done . I trust Dayang management statement that the Q4 performance is sustainable rather than kenanga statement which totally contradicted Dayang's management statement . Unfortuately , the bigger crowd do not have such details and tend to believe the IB's statement rather the Dayang's management statement .

Dayang has a total of 964 million shares . As I mentioned earlier , Dayang had generated RM 221 million cash in 2017 and another 297 million cash in 2018 . By taking an average of 259 million cash per year , it translates into 27 sen per share per year or about 7 sen per share per qtr . This earning is Solid Cash . Dayang has been using these cash generated to reduce its borrowings . Dayang 's business for the last 6 years were profitable even though the O&G suffered the biggest downturn .Dayang's balance sheet was affected mainly because it acquired Perdana by borrowing but the management had been able to reduce its borrowings at a rate correspond with the cash generated . Perdana financial has also been showing corresponding improvement in the last 3 qtrs . When Perdana business improved further , Dayang can also disposed part of its 60 % shares and use the cash to reduce its borrowings further .

Another O&G stock Serbadk which has a total eps of 26 sen in 2018 . The stock price in last closing was RM 3.87 with a PE of 14.65 . In fact the margin for Serbadk business is about 12 to 15 % which is lower than Dayang 's business margin of about 20 % .Although there are other aspects of fundamentals which could be different between Dayang and Serbadk , growth in earnings is still the number one factor in valuing a stock . As what Warren Buffet said , the value of a stock should be valued based on how much cash a company can generate in futures and discounted to the PResent Value .Dayang has generated RM 220 million cash in 2017 and another RM 297 million cash in 2018 based on Tien Ke 's video briefing .Although 2017 financial earning is a loss , it was actually a just paper loss due to impairement and depreciation . Again this is from analysis of Tien Ke.