walking as well help clear the mind .....

qqq3, I have a different view. Oil is still required and I do not know about US$10 / 20. Because as the price dropped, the majority of population will start to use oil again, like in 2016 / 2017 that led to the surge to US$ 80 a barrel. People will trade-in their EV for petrol vehicles.

Due to the intermittent issues with solar and wind, the cost of electricity (California & Germany) keep going up and for Germany they had to ripped out a forest to get the coal to keep back-up electric power plant running when sun don't shine and wind don't blow.

It is only when nations start to use nuclear power then oil may dropped to US$ 10 / 20 a barrel. Hear this: https://www.ted.com/talks/michael_shellenberger_how_fear_of_nuclear_power_is_hurting_the_environment?language=en

Have a good weekend - don't drink too much.

pjseow, indeed. Fundamental provides the basis.

Hope all is well with you. Take care all investors, have a nice weekend.

Mr Tan, indeed, leadership is very important and the foresight of the leaders, wow, what can i say.

Reading this book, " Collapse" by Jared Diamond. And there are many more islands, especially in the Pacific Ocean that virtually "collapse' due to deforestation and other factors (climate and human), eg. Easter island.

Have a good day and coming weekend.

Sad, so sad. Hibiscus is doing so well and yet the investing public see the opposite. Cash rich, no debt, doing all the right things to improve production as well as buying new fields cheap with high upside, yet "investors" are selling.

Sad indeed. There is a lot of "investors" that react to nonsensical utterance.

Very sad.

KC thanks for sharing. However, the proposed RM 80K/year or RM 7.2K/month seems a lot. Does this include having to pay housing loan?

PM can change his tune so fast.

The elite (politician from all sides) will want to continue to make the voters dumber (lacking intelligence or good judgment; stupid; dull-witted) by the introduction of nonsensical educational courses - black shoes, swimming courses, now khat (of no relevancy to today's world), so that the voters will continue to vote them and they (the politician) will continue to "rape" the country for their own benefit (only they know exactly what it is, some say to ensure continuity of their legacy, some say to continue one's religion, etc etc, whatever but never the economic improvement of the country or the people).

There are more than just educational issues but suffice here.

It just boil down to the politician willing to sell the country's future (3rd national car - enough said) so long they remain in power.

I posted before that the RM will not ever appreciate to below 4 to the US$ or below 3 to the Singapore dollar. I am now more convinced than ever. Malaysia is in a structural decline!! No reversal at all at the rate things are going.

As this is an investment site, so how? What future is there for investment in Malaysian (public listed) companies? Sorry, I do not see much future. Better to look outside Malaysia for decent gains going forward. Also to hedge ones wealth against the ever depreciating ringgit.

Sad isn't it.

Those who voted PH have made a "Faustian bargain" - i.e. a deal with the devil.

I remember just before GH14, I was vilified, "where have I been", still not "awake", PH going to do all the good things, separation of power etc etc. Well one year and few months on, not much have been achieved, except a lot of rhetoric.

But I suppose in a way it is good as it shows what PH is all about as well as what BN has been up to. Trying to stay positive here, but hard, damn hard.

Going forward, is there a solution, I will say, NO!

The elite (politician from all sides) will want to continue to make the voters dumber (lacking intelligence or good judgment; stupid; dull-witted) by the introduction of nonsensical educational courses - black shoes, swimming courses, now khat (of no relevancy to today's world), so that the voters will continue to vote them and they (the politician) will continue to "rape" the country for their own benefit (only they know exactly what it is, some say to ensure continuity of their legacy, some say to continue one's religion, etc etc, whatever but never the economic improvement of the country or the people).

There are more than just educational issues but suffice here.

It just boil down to the politician willing to sell the country's future (3rd national car - enough said) so long they remain in power.

I posted before that the RM will not ever appreciate to below 4 to the US$ or below 3 to the Singapore dollar. I am now more convinced than ever. Malaysia is in a structural decline!!

As this is an investment site, so how? What future is there for Malaysian companies? Sorry, I do not see much future. Better to look outside Malaysia for decent gains going forward.

Sad isn't it.

So the solution is KHAT??

https://klse.i3investor.com/blogs/savemalaysia/218244.jsp - Daim said Malaysia far from able to compete globally because of the education system. So khat will help?

No boss, friends/bro would be better, all equal here.

Have a productive weekend.

I do not know the Rev. but I thought that the points outlined are of interest, especially the fight between East and West, that is all.

The article by the edgemarkets is misleading. Perdana has to provide collateral (like Corporate Guarantees, title of vessels (if there is such a thing - much like land title), etc) for the Sukuk that will be secured by Dayang in the debt restructuring. Not cash! Perdana do not have it in the first place.

Please go to https://malaysiastock.biz/Company-Announcement.aspx?id=1158949 to get the correct story.

Good morning all.

dusti - cold hard truth? Maybe warm truth, not hard as it is a qualitative assessment. But, there is always a but, civil construction industry is one notoriously bad paymaster. There is that possibility of diversion of fund meant for MCM work to the construction work to maintain that (civil) project. When this sort of decision put to the Board, what do you think? I have seen many companies through wanting to increase "shareholder return" (sometime I wonder which shareholder's return) get into jam. The possibility is there.

Now, I am sure all of these three will have 5-years plan to develop the company. Surely capital (working or PPE) would be required. In Petra, they will need to go back to the respective major shareholders to seek approval or even funding (RI/PP). Hey, directors authority (spending) levels are also set, OK. If one research who the major shareholders are, one would come away with reservation/doubt. The major shareholders likely say, fund from internally generated fund or borrowing. With the type of cash flow, most unlikely, so the Board will be frustrated and dishearten. As Mr Yeo said, need CAPEX to renew vessels, etc. which company will have the capability?

Incompetent - I do not think that these (above) are sign of incompetence. But the choices presented for decision making is such. Also, most likely, (independent or otherwise) directors are selected such that they share major shareholders thinking.

A company with founder as director would more likely make decision that benefit him as a shareholder (and more likely minority shareholders too). Sometime it is not RM 1,000 / RM 10,000 / RM 100,000 or RM 2M but RM 800 M decision (RI/PP & sukuk). He himself has to come out with millions as well, do not forget that.

Ok C, fair I suppose without much "hard" facts except my conjecture.

Happy investing.

coolio, yes it is different because unclestock considered deposit placed with banks to be not as liquid as unit trust (ST Investment) - "very liquid assets", that is the term unclestock used. Deposit placed with banks might be used as collateral for loans and unclestock has been conservative here.

probability - thanks for sharing on the potential higher prices for Malaysian crude. Hibiscus will benefit more than Dayang in this particular case.

Keep them coming mate. Take care.

Thank you all for the likes, comments and sharing. Indeed, pputeh, one should stay within ones competency. Mine is oil & gas. But did you not like the joke?

deMusangKing, I was reminded of this: Mother Teresa was wandering the corridor and heard a young Sister shouting "F@$# off to the birds on the window ledge". She came in and advised, "Sister, all you had to say is shoo and the birds will F@$# off".

But thank you for visiting and appreciate it very much.

probability, yes CAPM is 9.5% and unclestock is indeed interesting and supercool. This will add to my laziness in studying new counters. I have included it in the write-up to avoid uncertainties. And importantly it is less than the several returns (on capital, equity, etc) for 2018. A positive sign.

Mr Yeo, interesting queries:

a) scale economies, you meant "economy of scale" - yes, Dayang certainly has economy of scale as their vessels will be used much more compared to the other two. Much like Airasia - keep the planes in the air. Base cost divided by more hours used, that is why I said Dayang has pricing power, price setter rather than price taker.
b) network effect - from my limited knowledge, this is more for internet type of businesses like Facebook, Google, etc. But, all the PSCs, production sharing contractors, (Shell, Carigali, ROC etc) - users, will definitely know Dayang and had used their service one time or another and will have experienced their capability and quality of delivery, which is good as far as I know.
c) process power - Carimin, Petra and Dayang will have similar process to implement the MCM works as this processes is quite universal in the other part of oil and gas regions. It will be the quality of delivery (QA/QC) and on time that become important and more importantly the equipment (in this instance, AWB/WB vessels) to deliver the MCM services.
d) Brand - in Malaysia, I would say Dayang has Brand power (in O&G, known to deliver), how to quantify, I am at a lost. In the region, Dayang probably known, but each Nation has their own peculiar requirements that may have impeded Dayang from forging outside Malaysia. The contract in Turkmenistan is via Petronas.
e) switching cost - to the PSCs that has contracts with either Carimin and Petra, it will cost them to switch to Dayang mid-way through current contracts. They will only do so if their appointed contractors are not performing or there is certain critical work that need doing as Dayang has the capability and capacity to response to quickly. However this type of work is rare and Dayang will charge an arm and a leg.
f) counter-positioning - I am at a lost here, looking forward to your clarification.
g) cornered resources - in a way yes. As the vessels under Dayang (& Perdana) are being used (generating cash) while those of Petra, ICON and Sea-link are in anchorage, the longer, the worst off for them. The PSCs are very particular that vessels meet the sea going standards as life is at stack (reputation risk), and these vessels need to be dry-dock every so many years. Each dry-dock will cost millions. Now if there is no jobs, obviously postponed and the longer the postponement, the higher the cost to dry-dock. So, vessels of Dayang becomes more valuable as they are always able to meet requirements. It is not in the conventional sense that Dayang owned all the AWB/WB, then no.

"you can safely ignore those valuation" - I am a bit lost here. Appreciate if you will advice, how then, to value Dayang's intrinsic value.

I was intrigued to actually find that there are so many ways to value a company and I am sure different method will probably be applicable to certain type of company and not to others. I am just too lazy to find out (if that is what you meant). A statistical average sound like a decent estimate of all the different methods at unclestock, after all, these are all estimates, no right nor wrong.

Nevertheless, many thanks for the interesting queries. I hope the clarification clear some (if not all) of the issues.

Happy Sunday.

p/s, gosh all comments received are serious, I hope the joke towards end help some.

The number matches that of Naim Holdings Bhd.

It certainly is interesting to see HLI having such a bullish view of Dayang.

What I do not understand is why is it so bullish in the Chinese media while in the English media, the re-rating is only to 1.49. And this figure 1.49, does not even appear in the tabulation. There is no consistency.

Probably, there will be another report soon from HLI.

Nonetheless, many thanks pjseow.

Thank you pjseow for the exciting info. Is this a paid service as I am not able to find it.

Had a closer look at the two IBs re-rating. While one had increased earnings (net profit) by 16% for 2019, the other earnings remains unchanged. Both their earnings are around 10 sens. But PER had been increased to 15 for one and 12 for the other.

I am still of the opinion that the profit margin used by both these IBs are low. So, there definitely is room for further er-rating to EPS greater than 15 sens for FY2019. Using their latest PER will gives RM 1.80 to RM 2.25

Happy investing.

From 20 Jun 2019 to 8 Jul 2019, HLIB has raised the target price from 0.88 to 1.26 to 1.49 (all before RI/PP). What a turn of event. Welcome. But this is still short of the intrinsic value of RM 2.09 to 3.64 (Ben's formula to 2-stages DCF method+28% discount).

Have a good week all.

Philip, thanks for sharing. Some dates (when bought) would help appreciate the returns better.

Have a good week ahead.

This is an interesting exercise. My take is DT need a deal within this year so that his re-election campaign can trumpet it as a win for him more than Xi, as he is already President for life. That is, China will not cut a deal yet, let DT sweat.

So, it will be B, F, K.

Thank you so much for the likes and all the kind comments - make it worth writing and sharing.

BLee, your question on payment for preparatory work - there should be payment (under engineering I think). Of course it will also depend on the amount actually spent, too small, Dayang may not claim for goodwill purposes.

During the low oil price recently, Dayang's revenue was not chicken feed, RM 730M. So even should oil price drop, there will be at least RM 700+M yearly revenue.

pjseow, yes, the insights most correct, thank you very much.

Bless you all, have a productive week ahead.

Thanks Philip for sharing. Yes I am interested in the talk but travelling, so the transcript would be good. Thanks again.

OK.

Thanks anywhere for sharing.

Happy weekend all.

thank you for the likes.

Thank you all for reading and encouragement.

Awesome, many thanks for the kind words all.

Ong8888, yes point noted. Thank you very much.

This is where the business side kicking in.

In most B2B, there are contracts / agreements signed that spelt out commitment (responsibilities / liabilities or terms & conditions).

So, an abrupt termination normally come with compensation.

For someone like Trump, a businessman, he should know this.

And in this instances, it is the US side that actually will compensate as well as suffer drop in services that would have been derived from the use of Huawei's equipment / components.

Furthermore, other (non-US) companies will now start to consider their businesses with (& in) US as they can also be targeted (like Huawei) next.

This is really the beginning of the "becoming second" of US, as the trust has been damaged.

Mr Tan, thank you, this is one of your better post.

There are currently more and more entities joining the e-wallet race. Eventually there will be a shake out.

Personally, will eventually use it as looking for change is most annoying and I am from the dinosaur age.

Reason why in China, Alipay and the others have not charge for the terminal and transaction fee is because they earn interest on the float (that is before money is credited to the merchant accounts). China central bank is proposing changes to this as technically the float money belong to the many merchants. And also the many users balance, no interest paid (unlike banks saving accounts).

I am not sure of Bank Negara rules on this.

Sorry, i meant timeline for your prediction on the share price.

Morning Jon, thank you for this sharing.

One question, what is your timeline for your forecast, one year, five years?

ha ha hah hahahhhahahahahahahahhahahahah

Welcome to the "new" Malaysia.

Everyone knows that changes must come through education and will take decades. However, education has always been manipulated since independence. Today is even worse, you know what I mean, so how to have chance for ringgit to appreciate given our ever deteriorating education level.

I think what the author is saying is the Ringgit did not appreciate, it is the US$ that is weakening.

Nevertheless, I do not see the Ringgit ever breaching the exchange rate of RM4 anymore. We are really stuck in the middle income trap. Government of the day said basically "we will continually rely on foreign labour" just like the previous government.

There is no creative invention from Malaysia, we are just user of other people inventions. This, in essence, is the trade war between China and US.

Selamat Hari Raya to all Muslim bloggers / investors and happy holiday to the rest.

Dayang will have better results now that Perdana just got an umbrella contract for 6 AHTS and 5 AWB from PETRONAS! When Perdana do good, Dayang will be better.

This contract requires Perdana to charter foreign vessels as its current 16 vessels not enough to meet this new demand (from Petronas).

Have an exciting weekend all.

Excellent news. The umbrella contract is from PETRONAS! No wonder the other day Perdana talked about chartering foreign vessels as their current 16 vessels will be all used up by 2H 2019.

It is heartening to read exchanges here about how past negative goodwill distorted the good Q3 2019 results. The report by certain quarters in the print media is awfully negative.

Yes, next quarter (Q4 2019) should be better as average oil price is higher. Next financial year will even be better as up to 8 new wells will be drilled in 2H 2019 to potentially boost production from about 9,000 bpd to about 11,000 bpd (+22%).

But economic climate and therefore, oil price is beyond management control for coming financial years.

Have a good day.

pjseow - many thanks for sharing.

Dayang is very much tied to Perdana, the loss at Dayang is mainly due to Perdana.

Should Perdana turn around in 2019 to profitability which appear to be likely, Dayang's result should be good.

qqq3 - all fair in love and war as they said. But I need to correct your perception on your second comment; except for the MCM awarded by Carigali in 2017, the remaining 5 MCM contracts (Murphy, Repsol, Nippon, KPOK & Hibiscus) were awarded post GE on 9 May. I also understand through the grapevine, there will be another contract award announcement soon.

And there is still about RM 4B tender book (HUC contracts + others), assuming a strike rate of 10%, potential to add RM 400M to the announced RM 3B (conservative) in hand before the year is over.

It will be interesting who is/are the (10%) private placement candidate(s).

Nonetheless, many thanks for commenting and I hope this meaningful (to me at least) exchange helps both of us / all of us to be better investors.

Have a good weekend - thank god it is friday - don't drink too much later.

pjseow - trust you read both Kenanga review (one in The Edge Daily & the other today at i3: https://klse.i3investor.com/blogs/kenangaresearch/207662.jsp), it is so negative that it borders on the unbelievable.

Appreciate your views, thanks.

Jon, many thanks for the comforting words.

Wow, what a week. Need to go back and study where the mistakes were. Looking at Kenanga estimates for 2019, Dayang going to make less money (net profit) compared with 2018. Profit margin is hammered down to just above 10%.

Anyone can help explain, thanks.

Think for a moment what US will do should China restrict export of rare earth to US.

While tariff war is not welcome, the Chinese goods tariff(ed) can be replaced with imports from other countries. Similarly goods withheld by US can be replaced from S.Korea, Japan or Europe. There is a choice.

Rare earth - is there a choice? Would that be announcing a WAR.

China tried this before (some years back) and back off.

pjseow - you are the only one here that talk some sense. Thank you for sharing.

RCPS intend to raise RM 455M not RM 445, please correct your own report as Perdana is advice by yourself.

VenFx - I had a look at Hibiscus and there is no mention of "rig" in Australia. Care to elaborate?

Meanwhile, the latest (Apr19) presentation material from Hibiscus indicated that there maybe "farm out" for VIC-P57 and joint development with other nearby operators for VIC-L31.

Do note that another side-track (Gua-P1) at Anasuria is being carried out that potentially will add another 1,000 bpd (net) to about 4,400 bpd production now. And the Cook water-injection well already drilled. Water line will be laid next few months for water to be pumped into the cook reservoir to increase production. While Hibiscus share is only 19+%, some additional barrels is always good. There is potentially more good news as the well drilled (for water injection) showed that the water oil line is deeper than anticipated. This may mean that there are more oil in the reservoir. Management indicated that this is under review / assessment.

Finally, with infill wells drilling at St Joseph to start anytime, next financial year, the total production would be higher at 11,000 bpd vs about 9,000 bpd now, a 22% boost.

Of course all this will depend on the oil price and sentiment of the market then. Nonetheless, more production is always better as operation cost will be further reduced. So, it is positive in my view and Hibiscus should be worth more.

Have a good week.