DESTINI (7212) DESTINI BERHAD : October Feature - Destini - Golden Destination

October Feature - Destini - Golden Destination

DESTINI (7212) DESTINI BERHAD

Many would had been in a puzzle on whether this is actually a start of the crisis, or just another mere correction in the market. The global equity took a severe beating in the last couple of weeks after seeing huge sell off with the DJIA testing on 16000 in one occasion. While in the local KLSE market, there are severe selling down, particularly in the Oil & Gas industry after the WTI Crude Oil and Brent Crude Oil slide into the border line of production cost. Currently, the WTI Crude is hovering at $81 per barrel while Brent Crude stood at $86. With this lowered crude oil prices, will it be a good opportunity to take on some position in battled down Oil & Gas stock?

Of course, for me, it would be definitely a great opportunity to scourge for good deal now, which is why Destini Berhad had caught my very attention.

Let's have a quick look on the latest chart of Destini Berhad - 7212

Destini had been trading at the range of RM 0.65 before the triggered panic selling that had caused it to plummet into the range of RM 0.50. Destini did saw a good range of support at the price level of RM 0.50, particularly with the share buy backs from the Datuk Rozabil Abdul Rahman. At the range of RM 0.50, Destini would be looking to climb back higher into the range of RM 0.60 after a quick consolidation at RM 0.50.


Destini - Turning Around, Moving Forward

Destini Berhad, formerly known as Satang Holdings Berhad, had came out from it's suspension with a series of corporate exercise including the entrance of white knight - Datuk Rozabil Abdul Rahman in turning over the company to become the one stop center for the supply of safety equipment and MRO services in the aviation, marine, oil & gas and defense sector.

- Defense division
The entry of Datuk Rozabil had definitely transform Destini Berhad into a very powerful vehicle in the marketplace after seeing major government contracts being secured by Destini's subsidiary company. More than 80% of Destini's revenue is from government contracts. The latest contracts that is secured from the Ministry of Defense Malaysia (MINDEF) consist of:

- 7th November 2013, Destini Prima Sdn Bhd accepted a letter of award from the MINDEF to provide the first line and above maintenance services for the safety and survival equipment for Royal Malaysia Air Force (RMAF) for a total sum of RM 95,027,217 for a period of 3 years commencing 3rd October 2013 to 2nd October 2016.

- 4th December 2013, Destini Prima Sdn Bhd accepted a letter of award from MINDEF to supply defense equipment for the RMAF for a total contract sum of RM 46,317,000 for  3 years.

- 6th April 2014, Destini Prima Sdn Bhd accepted letter of award from MINDEF for the appointment as one of the panels to supply the spare parts for "Non-Proprietary" aircraft to RMAF for a total contract sum of RM 98.85 million for 3 years.

While the government contracts is a coming in handy, Datuk Rozabil had been vying to push Destini's future revenue further into providing specialized services in the Oil & Gas industry by acquiring Samudra Oil Services and tapping into the MRO services.


- Oil and Gas division
With the shrinking down crude oil production in Malaysia and the gradual rising consumption, Malaysia will be ending up importing oil should there be no counter measure to increase the production of the crude oil.

This will definitely drive for a higher demand to see more exploration activities in finding more oil reserves, which will include deep water exploration in the coming days.

Samudra Oil Services, specialized in providing tubular handling equipment and running services which are vital to the overall process of the production of oil and gas. The services which involved the handling and installation of multiple joints of pipes to establish a cased wellbore and the installation of smaller diameter tubing inside a cased wellbore to provide a conduit for oil and gas to reach the surface. With Malaysia driven to see more drilling activities, well construction which require the increased complexity of tubular services coupled with a limited number of companies that provide tubular handling equipment and running services in both domestic and global markets shall open up a bright prospectus to Samudra Oil in the coming days.

Samudra Oil Services, which is a licensed Petronas contractor had recently bagged in a 2+1 year contract from Lundin Malaysia B.V to provide hammer services and equipment for it's drilling campaign, pushing Samudra Oil's order book to more than RM 600million.


- Maintenance, Repair and Overhaul (MRO) division
Destini is will be looking to see more MRO contracts in the aviation, marine and oil & gas industry. The recent acquirement of Techno Fibre Group and the 51% stake at Vanguard Composite Engineering is a significant move to see Destini's thirst to make it big in this sector, which comes in time with the new regulation that is set by the International Maritime Organization that all ship operators and owners need to abide by the ruling and change the on/off load hook release systems for lifeboats, which is mandatory from July 1, 2014.  (Source - ETP Pemandu)

Currently, Destini is receiving income from overseas operations which had stretched to Dubai, Australia, China, Singapore, Brazil and North Sea.

With Datuk Kamarudin Meranun as top 20 shareholder in Destini, Destini will be looking to bag in MRO projects from AirAsia Berhad, which is pending it's EASA (European Aviation Safety Agency) certification in order to expand it's services to the commercial aviation.

Destini will be looking to acquire the remaining 49% in Vanguard by the end of 2014.

Destini had recently saw massive open market purchases from Datuk Rozabil as well as direct business transaction from Datuk Lim Nyuk Sang @ Freddy Lim.

Datuk Rozabil had been actively purchasing huge tranche of shares in open market and direct business dealing at the price range of RM 0.60 to RM 0.65 through his privately owned vehicle BPH CAPITAL SDN BHD. Currently, Datuk Rozabil is holding 256,308,800 (32.06%) of stake in Destini.

The recent massive stake up of Datuk Lim Nyuk Sang had definitely put the whole development of Destini more exciting. Recently, the entry and exit Datuk Lim Nyuk Sang in Bornoil had saw a series of interesting development with the emergence of HapSeng as the substantial shareholder of Bornoil. Bornoil had since broke above RM 0.80.

Topping the shareholder list in Destini had saw several identical shareholder of Kretam Holdings Berhad, which is owned by Datuk Lim Nyuk Sang @ Freddy Lim. They are Wong Len Kee, Chua Peng Boon and BPH Capital Sdn Bhd.

Besides that, the infamous Datuk Ambrose Lee which had then swap SugarBun and NBT (North Borneo Timber) with Warisan Harta Sabah Sdn Bhd back then at 1997 had been sitting in the 5th position of the top shareholder with 30 million shares with his low profile vehicle - Victoria Capital Sdn Bhd.

With a huge stakes in hand from high rank political linked businessman in Destini, the game might just be going to get more interesting in the coming days.


Conclusion
With much great prospect laid infront and huge stakes from high rank political linked businessman in
Destini, I believe that it would be a great chance to lock in a position with Destini when it is below RM 0.60, considering it's previous private placement with institution being placed at RM 0.60, and employee share option scheme (ESOS) being priced at RM 0.53, and massive open market purchase from Datuk Rozabil at the range of RM 0.65.

Destini will be looking to challenge a short term target of RM 0.60, and as more development starts to unfold within it, Destini will be potentially trading above RM 1.00 in the coming days.

Golden Destination? You decide.
Bone's short term TP : RM 0.65

Cheers and have a nice day.

Regards,
Bone

Bonescythe Stock Watch
http://bonescythe.blogspot.com/