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Dayang: to sell or not to sell


Koon Yew Yin 9 Jan 2020

The title of this article sounds like the opening phrase of a soliloquy uttered by Prince Hamlet of Shakespeare’s play Hamlet quote “To be or not to be, that is the question”.  

Ever since Dayang has been shooting up so rapidly from 50 sen to close above Rm 2.50, an increase of more than 500% within 1 year, every shareholder has been asking himself this question “To sell or not to sell”. Based on the daily traded volume of several million shares there must be less shareholders decided to sell than buyers on most days. As a result, Dayang has gone up higher and higher. 

Those who sold earlier at Rm 1.00 or Rm 1.50 or Rm 2.00, must be very disappointed because they could not buy back at cheaper prices. If they do not buy back at higher prices, they will miss the opportunity to buy Dayang which has a very good profit growth prospect for many more years to come. 

Due to the current US-Iran war, there are more sellers than buyers.  As a result, the price has been dropping in the last couple of days. The sellers must remember that they will soon regret when the price continues to go higher and higher. 

My intention for writing this article is sincere and honours. As I said, whether you buy or sell will not affect the share price. As long as there is oil, Petronas will continue to pump because Petronas has already paid for the cost of the oil rigs and awarded more maintenance contracts to Dayang.

I have more than 50 years’ experience in doing business and searching for good shares to buy. Very seldom I can find one with long term profit growth prospect as good as Dayang. 

If you google you can see that Malaysia started oil exploration activities in shallow waters in the 1970s and started active extraction and production in the 1980s till today. There are currently over 900 offshore platforms of which almost 600 of them are over 20 years old.

Based on these facts, you can be sure that Dayang will continue to secure more and more oil rig maintenance contracts for many more years to come. 

I cannot find another stock that complies with my share selection golden rule of 2 consecutive quarters of increasing profit. Dayang 1st quarter EPS – 0.47 sen, 2 quarter EPS 5.7 sen and 3rd quarter EPS 11.1 sen. I was told that its 4th quarter EPS is much better than its 3rd quarter. Assuming its 4th quarter is 15 sen, its annual EPS will be 31 sen. Assuming it deserves to sell at P/E 10 the minimum price should be Rm 3.10 per share. I believe its price will be above Rm 3.00 before end of next month when the annual result is announced. 

I am very confident its profit for next year will be more than this year because the company has already resolved its financial constrain by its recent right issues. 

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