Dayang Enterprise; Buy
Price Target: RM5.90; DEHB MK
 

Dayang announced that it has secured a contract from Petronas Carigali for the provision of hook-up, commissioning (HUC) and topside major maintenance services for 5 years (May13-May18). There is no disclosure of contract amount but we believe that it is likely to be worth more than RM1bn.

The announcement comes as no surprise as the market has been expecting Petronas Carigali to award its HUC contracts this month. To recap, Dayang has also recently secured the Pan Malaysia HUC contracts from Murphy (RM314m) and Shell (>RM2bn). With these contract wins, we estimate that Dayang has already received more than c.RM3.5bn worth of HUC orders YTD, taking its order book to c.RM4.7bn.

We believe that the 5-year HUC mega project will be a game-changer for the company, accelerating growth over the next 5 years. We continue to like Dayang for its clear earnings visibility, outstanding track record and solid balance sheet (RM86m net cash). Reiterate our Buy rating with RM5.90 TP (based on 15x FY14 EPS), implying 20% upside potential.

Source: HwangDBS Research - 28 May 2013