Friday 29 Mar 2024
By
main news image

KUALA LUMPUR (May 14): Analysts are of the view that Dayang Enterprise Holdings Bhd will be better positioned to win bigger jobs with the likely takeover of Perdana Petroleum Bhd.

According to a note by CIMB Research, the synergies between the two companies are in the area of brownfield services which requires workbarges and workboats.

The research house pointed out that Perdana currently has five workbarges and a workboat deployed to Dayang on long-term charters.

“The control of Perdana would give Dayang better access to Perdana’s young fleet of 19 vessels, of which 17 are in operation and two are due for delivery in financial year 2016 (FY16),” it said.

Meanwhile, Kenanga Research noted that it is no secret that Dayang intends to take Perdana private.

This is due to the more compelling valuation of Perdana following the crude oil price slump while synergistic benefits can also be achieved with Perdana’s fleet of vessels complementing Dayang’s hook-up and commissioning (HUC) capabilities.

“We believe the deal could put Dayang in a better position to target a bigger slice of the next round of the Pan Malaysia HUC Umbrella contract (possibly worth RM10 billion) expected to be awarded in 2018 to 2019,” said Kenanga.

It added that Perdana is likely to be the least exposed offshore support vessel player to renegotiation of rates by Petronas as it is already providing relatively low rates compared to its peers given contracts were won pre-rebound cycle.

Kenanga has an “underperform” call on the Perdana with a target price (TP) of 92 sen per share, pending the official announcement later today.

Its TP is pegged to unchanged 9.0 times target price earnings ratio (PER) which is in line with small cap valuation range of an industry down cycle.

CIMB on the other hand has an “add” rating on the stock on a TP of RM1.61.

“Perdana’s share price has rallied by 25% and outperformed the KLCI by 26% since we released our March 26 note. The current share price of RM1.50 — the highest year-to-date — is just 7% shy of our RM1.61 target price, which we are maintaining for now pending the release of transaction details,” said CIMB.

“We advise shareholders to hang on to their shares,” added the research house.

      Print
      Text Size
      Share