Review of Q1 2020 Performance - Dayang (5141) DAYANG ENTERPRISE HOLDINGS BERHAD - 23/6/2020
Dayang Current Share Price: RM1.29
Review of Financial Performance for Q1 2020 (refer below) - look at the pattern for Q1, if you realised Q1 is always lower.
1. The Q1 performance is always lower due to offshore topside maintenance operations ("Offshore TMS") which is normally affected by bad weather (moonsoon) at the beginning of the year. Thus you can always refer to Q1 results for the past years it is always lower compared to other quarters. Given the figures we look at, the results are amazing as in prior years they seem to be always making losses in Q1. Offshore TMS is their main revenue contributor. So if due to wheather the overall performance of the Company get affected, not the Company's fault, so for me it's a positive point. Revenue and PBT is higher due to higher work orders received and performed under the topside maintenance contracts and also higher vessel utilisation.
2. The performance of the invesment holding and marine charter segment is terrible.
If not because of these two segment, profits would be higher. From Page 10 in the Q1 report, finance costs is amazingly high, and for the marine charter, based on the facts I observed, would be even worse in the coming Q2 quarter. The report did not mentioned why marine charter bleed, which is not transparent, so based on things you do not want to talk about, coming quarters I guess you're hinting me it will continue to be bad?
3. Operating cash flow is excellent.
Cash and bank balance increase from RM203mil (31/12/2019) to RM538mil (31/3/2020) an increased of RM335 mil. They managed to collect RM264 mil from their customer during the quarter in which their credit term is 30 days from invoice date. Great job!
4. Company still failed in getting the private placement done which is required based on the Sukuk program covenant to raise RM75mil.
This proposal seems to be dragging for a year already? They announced this since 17 May 2019 and nothing seems done yet. You can assess for yourself how competent the Board of Directors and the management are. However, bright side is some Sukuk Holders already give a green light to let them differ for a year starting 30/6/2020 but some have yet to respond. Anyway they have RM538mil cash if they want they could repay it anyway. The extra cash might be use to cushioned the impact of Covid-19 I suppose.
Prospects
Seem to be good with huge book order. However for the coming quarter, if the client can't be opened for work you also can't serviced them and due to the lockdown, figure out yourself how would it be. Refer below:
Conclusion
No target TP will be given, since based on my own opinion most holders won't like it. I'll let you decide for yourself after reading the facts. You can read Public Invest, MIDF, HLG and Kenanga's target TP soon since they cover this stock, certainly you will be happier with their TP unlike mine.
Thanks for reading!
Review of Financial Performance for Q1 2020 (refer below) - look at the pattern for Q1, if you realised Q1 is always lower.
1. The Q1 performance is always lower due to offshore topside maintenance operations ("Offshore TMS") which is normally affected by bad weather (moonsoon) at the beginning of the year. Thus you can always refer to Q1 results for the past years it is always lower compared to other quarters. Given the figures we look at, the results are amazing as in prior years they seem to be always making losses in Q1. Offshore TMS is their main revenue contributor. So if due to wheather the overall performance of the Company get affected, not the Company's fault, so for me it's a positive point. Revenue and PBT is higher due to higher work orders received and performed under the topside maintenance contracts and also higher vessel utilisation.
2. The performance of the invesment holding and marine charter segment is terrible.
If not because of these two segment, profits would be higher. From Page 10 in the Q1 report, finance costs is amazingly high, and for the marine charter, based on the facts I observed, would be even worse in the coming Q2 quarter. The report did not mentioned why marine charter bleed, which is not transparent, so based on things you do not want to talk about, coming quarters I guess you're hinting me it will continue to be bad?
3. Operating cash flow is excellent.
Cash and bank balance increase from RM203mil (31/12/2019) to RM538mil (31/3/2020) an increased of RM335 mil. They managed to collect RM264 mil from their customer during the quarter in which their credit term is 30 days from invoice date. Great job!
4. Company still failed in getting the private placement done which is required based on the Sukuk program covenant to raise RM75mil.
This proposal seems to be dragging for a year already? They announced this since 17 May 2019 and nothing seems done yet. You can assess for yourself how competent the Board of Directors and the management are. However, bright side is some Sukuk Holders already give a green light to let them differ for a year starting 30/6/2020 but some have yet to respond. Anyway they have RM538mil cash if they want they could repay it anyway. The extra cash might be use to cushioned the impact of Covid-19 I suppose.
Prospects
Seem to be good with huge book order. However for the coming quarter, if the client can't be opened for work you also can't serviced them and due to the lockdown, figure out yourself how would it be. Refer below:
Conclusion
No target TP will be given, since based on my own opinion most holders won't like it. I'll let you decide for yourself after reading the facts. You can read Public Invest, MIDF, HLG and Kenanga's target TP soon since they cover this stock, certainly you will be happier with their TP unlike mine.
Thanks for reading!
Disclaimer
This is not a recommendation
to buy or sell. Any decision made is the sole responsibility of the
user itself. Any financial advise or decision should be clarify with a
financial advisor before executing.
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