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Dayang: shareholders are confused


Koon Yew Yin 25 Nov 2019

Mr Ooi Teik Bee has sent out his circular with a target price of Rm 3.00. 

Kenanga has upgraded from Rm 2.00 to Rm 2.35 

Hong Leong Investment Bank’s target price is Rm 2.30 

MIDF’s target price is Rm 2.69. 

PBB has down graded from Rm 2.00 to Rm 182 

Dayang’s 1 quarter EPS -0.41 sen, 2nd quarter 5.71 sen and 3rd 11.1 sen. Assuming its 4th quarter EPS is the same as its 3rd quarter 11.1 sen, its annual EPS will be 27.5 sen. Just based on P/E 10, Dayanag’s price should be Rm 2.75.  

Currently as I am writing this piece, Dayang and Dayang OR are dropping. Dayang dropped 12 sen to Rm 1.95 and Dayang OR dropped 15 sen to 98 sen. 

I think some shareholders are selling the mother share to buy more Dayang OR and some are selling Dayang OR because they do not have money to convert their OR to mother shares. Some investors are selling 1 mother shares to buy 2 OR and after conversion, they will have about 2 twice the number of Dayang. All these trading are puzzling and confusing to investors.  

Dayang’s long term growth prospect

As long there is oil, Petronas will continue to pump oil for sale. Even if the oil price dropped drastically, Petronas will still continue to pump because all the cost of the oil rigs has been paid and accounted for. Dayang being the largest oil rig maintenance contractor will have more contracts. Dayang should have very good profit growth prospect which is the most powerful catalyst to push the share price higher and higher. 

In the last few months, I have been searching for any stock to diversify in vain. I cannot find another stock with similar quality as Dayang.     

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