KUALA LUMPUR (June 15): Hong Leong Investment Bank (HLIB) Research has maintained its “buy” rating on Dayang Enterprise Holdings Bhd at 98 sen with a higher target price (TP) of RM1.19 (from RM1.04) and said it came away feeling positive from a conference call with Dayang as the group had guided on: i) increasing offshore support vessel (OSV) charter rates (both AHTS and barge) as the number of OSVs in the market has declined over the years; ii) higher blended utilisation rates for Perdana’s OSV fleet in 2Q of more than 70%; and iii) better job win and execution prospects in FY22-23F as guided from the Petronas Activity Outlook 2022.

In a note on Wednesday (June 15), the research house said the outlook for OSVs are expected to be slightly better in 2022 as there are a total of 336 support vessels (production: 138; drilling: 198) expected to be chartered throughout the year as compared to 289 support vessels (production: 151; drilling: 138) in 2021.

Petronas has guided that there will be consistent demand for vessels supporting production operation over the next three years.

Meanwhile, higher hook-up and commissioning (HUC) and maintenance, construction and modification (MCM) man-hours are also expected for 2022 (HUC: 6.3; MCM: 11.5) as compared to 2021 (HUC: 4.7; MCM: 8.5).

HLIB said Petronas raised its 2022 total capex guidance to RM60 billion (from RM40-45 billion previously).

“As we deem Dayang the market leader for MCM/i-HUC activities, we are confident that the group will be a major beneficiary of this development.

“No changes to our earnings estimates. Maintain 'buy' with a higher TP of RM1.19/share (from RM1.04 previously),” it said.