Posted by titus > 2019-05-17 07:12 | Report Abuse

Wow...such a detail analysis. Appreciate it but can it withstand tge pressure of FF sell off....something to ponder about.

Posted by pjseow > 2019-05-17 08:58 | Report Abuse

teoct ,very good analysis .You have done a lot of homework on dayang business. The 2019 estimate of 970 million revenue is on the conservative side. FY 2018 Dayang already hit 935 million. My estimate is 1.1 billion with eps of.about 25 sen.

Posted by rajachulan > 2019-05-17 09:19 | Report Abuse

Prospects
We are proud to deliver our highest-ever quarterly revenue in the fourth quarter of 2018 which is typically a
seasonally weak quarter due to the monsoon weather. However, for this current quarter, offshore activities
were ramped up and works continued to be issued to us under time write (unit rates) and lump sum work
orders. This remarkable achievement came on the back of the robust work orders issued for the PCSB
Maintenance, Construction and Modifications Contract (MCM) and Topside Maintenance Services works
under the Pan Hook-up and Commissioning Contract (Pan HUC) as well as the newly minted Pan MCM
Contracts which were rolled out in the fourth quarter.
As a result of the strong operational performance in the fourth quarter of 2018, Dayang has also recorded one
of the highest quarterly profit after tax in our history. This is largely attributable to better cost control,
improved efficiency and streamlined project management. It is also evidently positive that vessel utilisation
came in stronger at 73%in the fourth quarter, compared to a utilisation rate of 51% for the fourth quarter a
year ago. Our fleet utilisation has been gradually improving since the first quarter of 2018 when it was as low
as 27%. We are particularly delighted to note that the synergistic collaboration between Dayang and its
subsidiary, Perdana Petroleum has indeed worked out satisfactorily and this should reinforce our position to
be the leading integrated MCM player.
Barring any unforeseen circumstances, we are optimistic that the strong earnings trend will be sustainable,
premised on our fairly sizable order book of RM3 billion to last us at least until 2023. Notwithstanding the
volatility in oil price, we remain upbeat on the company’s future prospects as Dayang has emerged stronger
after going through one of the most challenging period over the past few years. We are confident that our
balance sheet will continue to be strengthened as the impressive financial performance in 2018 has clearly
demonstrated.
After securing a larger portion of the Pan MCM contracts estimated at RM1.5-2.0 billion from multiple
production sharing contractors in Malaysia this year, Dayang has also started to look at international
expansion to further grow the company.
In November 2018, Dayang together with Gujurly Inzener, its local partner in Turkmenistan, via a joint
venture company, were awarded a contract for the provision of facilities maintenance support for Petronas
Carigali (Turkmenistan) Sdn Bhd. The value of this contract which is estimated to be around USD100 million
covers a three-year period effective from 01 January 2019 to 2021 (with an option to extend for a further
period of one year). This contract is expected to contribute positively to Dayang’s profitability.
As for our subsidiary Perdana Petroleum Berhad (PPB), the proposed debt restructuring scheme with the
financial institutions under the Corporate Debt Restructuring Committee (CDRC) of Bank Negara Malaysia is
still in progress. Once this restructuring is finalised, PPB and Dayang Group should emerge stronger than
before. We are hopeful that Dayang will return to its glorious days in the not-too-distant future as we
carefully execute our long-term business plans. The Board will remain vigilant and continue to exercise due
care and prudence in the running and administration of the company’s business.

Posted by rajachulan > 2019-05-17 09:20 | Report Abuse

people dont read financial report these days?

Posted by teoct > 2019-05-17 09:51 | Report Abuse

Thank you all for reading. Comments - thank you for taking time to pen your thoughts. And the likes - many thanks.

@rajachulan - I am not sure they read in detail and appreciate the nuance (subtle hint). Of course I may be totally wrong in my assumption that coming Q1, compared to previous years Q1 will be about the best ever in Dayang history.

@pjseow - indeed Dayang can do more and RM1.1B is highly probable. In my alternative analysis, I have RM1.17B (err i'm spiting hair here) but I stayed on the conservative side in the write up.

@titus - yes, this hedge fund is a pain in the ass. This selling would go on for about a couple of weeks. Need to be patient here. Eventually, there is no denying Dayang coming superior performance. Hedge fund by nature are short term in thinking and respond to small changes in big way, thus causing increase volatility. Patient.
I just wonder what that person going to say to his/her boss for losing a couple of millions.

Have a good weekend.

Posted by qqq3 > 2019-05-17 10:11 | Report Abuse

I guess another example of knowledge does not mean profits......hardwork does not mean rewards

Posted by qqq3 > 2019-05-17 10:17 | Report Abuse

at one time, people also know the most minute details of.......Hengyuan and LionInd..........now this.

Posted by rajachulan > 2019-05-17 10:29 | Report Abuse

@teoct I am 100% with you on dayang prospect..it just...instead of going through the numbers... i rely on the credibility of mgmt shown in prospect...

I dealt with these numbers in my real life profession... I know how these numbers were presented...so not going to mention them anymore...

to me... it is the vision of the mgmt that matters... and their credibility on how they communicate their vision in the prospect section...

like layhong.... yap can promise you moon and star... but ended up delivering only empty air... if you choose to give this kind of mgmt 2nd chance... dont blame people later...dont even blame yap...

now... let see how the newly RE listed chicken farm can deliver...

gdluck and enjoy

p.s i was forced to sell dayang earlier when i found myself in the middle of the sheep herd...herd coming out from nowhere...out of sudden...in large number... lol

Posted by qqq3 > 2019-05-17 10:32 | Report Abuse

dayang is in a very interesting price zone.....I mean, it is not $ 1.70 now..........but?

Posted by rajachulan > 2019-05-17 10:47 | Report Abuse

I am not entering now qqq3...

10 days line already died...
10 weeks line start pointing down...

respect MR MARKET...

because good prospect dayang has.. i will keep her in watchlist to keep watching and waiting for MR MARKET's return...

Posted by qqq3 > 2019-05-17 10:48 | Report Abuse

good for you....I see more buts than reasons to buy......

Posted by dusti > 2019-05-17 11:00 | Report Abuse

I am not a share holder but I am impressed by your detailed analysis. Many assumptions. You actually wrote a book and I would welcome an executive summary of your final recommendation. Keep on trucking!

Posted by Choivo Capital > 2019-05-17 11:09 | Report Abuse

Teoct,

I don't think you actually understand the business. Because the numbers are all projections of current to the future etc. This is the first time i see someone use bayesian to calculate earnings.

You may feel differently, but for a "know nothing" business, ie business you know nothing about. A good test is this, can you answer the below questions well.

(who are the competitors? What are their edge? Barriers of entry? Cost base and competence comparison? Value of services provided compared against competitors? etc).

If you can't answer these questions, the only price worth paying is far below replacement cost/book.

Dayang is clearly above that. In any event, good luck. I wish you all the best.

Posted by teoct > 2019-05-17 11:10 | Report Abuse

@qqq3, thanks for reading. Yes, knowledge can kill if not use properly. But I think this is better than NATO - no action talk only.

You are interested in Dayang? Why, because of the famous person or all these write-up that gives you comfort to look? Yes, price now is better than 1.70 Care to share the many buts ...... it will certainly help sharpen my forecasting and be a better investor, many thanks.


@rajachulan - yes character of management or good management in general is very important in investing. I have friends who know the top management very well and it is a comfort what they (my friends) said.


Happy investing.

Posted by Choivo Capital > 2019-05-17 11:12 | Report Abuse

If its a punt/speculation, what you need to know is not the intrinsic value of the business.

But what other people think the intrinsic value of the business, and how is their psychology regarding it.

Posted by teoct > 2019-05-17 11:25 | Report Abuse

@dusti - thanks for your comment. Yes, I was trying to be short and concise, but heck. Point taken and I will attempt an executive summary in future.

@Choivo Capital - Jon, I did not compare with competitors as I was lazy to be honest, yes if I analysed all the questions you asked, I will be working full time with some IB. I am not and I am in my sunset years, no excuse but sometime my gut tells me this is enough. It is actually hard-work and stressful too (skin in the game) despite now the much much easier access to information.

Nonetheless, for info, I used to ride on this type of AWB - enough said. But thanks for the comments. I will ponder on it.

Have a productive coming weekend.

Posted by qqq3 > 2019-05-17 16:09 | Report Abuse

teoct > May 17, 2019 11:10 AM | Report Abuse

Care to share the many buts
=========

I am a trader...the buts have more to do with trading.
but seriously, Dayang is not a very high quality company also.

Posted by teoct > 2019-05-18 10:07 | Report Abuse

qqq3 - many thanks for your sharing. But is the query an abuse as "Report Abuse" - I do not understand this.

Choivo Capital - thank you so much for the well wishes. I am not good at psychology and I am going to need tons of well wishes given the RI just announced.

And qqq3, your take on the RI is most succinct. Yes, bankers prefer to lend to a stronger entity than a weaker one. I need to internalized this.

From the many comments, there is no mention that with this regularization, local institutions will now be allowed to invest in Dayang / Perdana. Whether they will return is another issue.

Again to all of you, readers and commentators, thank you again for sharing and I hope these exchanges make all of us better investors.

Posted by VenFx > 2019-05-18 11:36 | Report Abuse

Hi ! Teoct,
Thankx for your valuable sharing in Dayang.
I remember your in depth sharing for Hibiscus.

How would you see Hibiscus's plan to explore the rig in Australia ?
Any simple guidance on that ?

Posted by qqq3 > 2019-05-18 11:43 | Report Abuse

teoct qqq3 - many thanks for your sharing. But is the query an abuse as "Report Abuse" - I do not understand this.
=========


neither do I

Posted by qqq3 > 2019-05-18 11:52 | Report Abuse

teo

u are hardworking chap.

I think if u follow example of Philips and focus exclusively on high quality companies, u will retire very rich.

lower quality companies is tough to predict.....suitable for trading only and that do not need indepth analysis.

Posted by 7300 > 2019-05-18 11:55 | Report Abuse

With geopolitic issue n rising Crude oil expected to be above usd80 n bankers around I don't bother right or underwear issues,it is about opportunity cost comes with risk or reward.

risk?even makan also can get stuck or constipation.

Posted by jefferykong > 2019-05-18 12:16 | Report Abuse

great detail! what is entropy?

my opinion, if Dayang posts two more good quarter profits and this private placement + rights issue exercise to complete, then only this stock price will find its strength to move up.

IB wants lower entry price to the private placement, especially when one of them has been given the job to do this. now it makes sense, the lower target price and sell calls. too high price, private placement of 10% may not be successful. ROI.

famous uncle selling? meeting margin call probably as he claimed. but if the rights issue of 1 out of 10 shares, he needs some cash. sell earlier for later purchase?

my guess is next quarter profit will not be good, else how to maintain at current price or force it lower. how many IB sell calls also no use. in any case, Dayang owners will not want too cheap entry into their company. win win is the key.

Posted by 7300 > 2019-05-18 12:19 | Report Abuse

there is no new lowest n highest,only the trends!

Posted by teoct > 2019-05-20 18:53 | Report Abuse

VenFx - thank you for reading. I will need to go back to check on Hibiscus.

qqq3 - thank you for the kind words and indeed that is my aim to be a multi-millionaire like Mr. Philip. But I need ammunition, and I am of the opinion that Dayang, while you think is not a great company, is a company with RM3.7B in hand. Anywhere it is another big debate what are the attributes of a great company.

7300 - thank you for commenting.

jefferykong - Please google it. Thank you for reading and taking time to comment.

Tomorrow, interesting time.

Posted by qqq3 > 2019-05-20 18:59 | Report Abuse

sted by teoct > May 20, 2019 6:53 PM | Report Abuse

what are the attributes of a great company.
==========

u will know when u see one.....if u have a head for investments.

Posted by teoct > 2019-05-21 10:34 | Report Abuse

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.

Posted by teoct > 2019-05-23 11:32 | Report Abuse

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.

Posted by Choivo Capital > 2019-05-23 11:35 | Report Abuse

Mr Teo,

"(who are the competitors? What are their edge? Barriers of entry? Cost base and competence comparison? Value of services provided compared against competitors? etc).

If you can't answer these questions, you know nothing about the business and the only price worth paying is far below replacement cost/book."

This lesson when i learnt it was not that cheap as well.

I hope you did not have too much in there.

=====
Posted by teoct > May 23, 2019 11:32 AM | Report Abuse

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.

Posted by teoct > 2019-05-24 10:15 | Report Abuse

Jon, many thanks for the comforting words.

Posted by teoct > 2019-05-24 10:20 | Report Abuse

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.

Posted by qqq3 > 2019-05-24 10:46 | Report Abuse

teoct > May 24, 2019 10:20 AM | Report Abuse

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.
=============

Kenanga tp of 80 is following the patterns of other rights issues and a bearish environment ....no one knows it will come true or not.