BIMB SECURITIES RESEARCH

MARKET INSIGHT
PP16795/03/2013(031743)

Thursday, 24 May, 2012

Results Review

Dayang
Below Dragged By Weather
DEHB MK 1,100.00 Equity 550 2.25 1.41 0.7 28.2% Y n.a. Altman Z-score YTD price chg YTD KLCI chg Beta Major Shareholders Naim Cendera Holding Ahmad Shahruddin Ling Suk Kiong 5.5 9.3% 0.6% 1.1 33.6% 10.1% 10.0%

Buy
Price: Target Price: RM2.00 (21.5% upside) RM2.43
Dayangs 1QFY12 net profit of RM15.7m represents 16% of our full year estimates. While we had expected monsoon season to cause lower quarterly activities, the impact is worse than expected following the 10% and 5% contraction in YoY revenue and bottomline. In terms of orderbook replenishment, prospect remains bright with the upcoming tender for up to RM7bn of hook-up and commissioning contract by Petronas and PSCs. We tweaked our FY12 and FY13 estimates lower by 6% and 3% respectively, maintain Buy with revised target price of RM2.43 from RM2.59 previously. QoQ helped by margin improvement. As expected QoQ performance was affected by the monsoon season which caused revenue to dip by around 25%. However, due to lower administration expenses and net interest income generated from cash holdings, bottomline improved by 25%. The result was only 16% of our full year estimates as compared to the last 3 years 1Q figures which made up about 22% of full year performance. Surprisingly lower YoY performance. YoY performance was surprisingly below expectation with revenue and net profit downed by 10% and 5% respectively with the Group cited weather condition as the main cause while margins were little changed. Eyeing for major catalysts. While the result was below expectation we are still positive on the Groups prospects in replenishing its order backlog which currently stand at more than RM1.3bn particularly with the upcoming tender for up to RM7bn hook-up and commissioning contract by Petronas and PSCs where result is likely to made known towards the end of the year. Another catalyst is its potential bigger investment in Perdana Petroleum which we opine to be value and operation accretive. Earnings downgraded. Given the set of results, we have tweaked our FY12 and FY13 estimates lower by 6% and 3% respectively. View & Valuation. We continue to hold our Buy call on the counter but at a lower target price of RM2.43 based on PER of 14.5x on FY12 EPS.

Stock Data Bloomberg Ticker Market Cap Issued shares 52-week range (H) 52-week range (L) 3-mth avg daily volume Free Float Shariah Compliant Financial Derivatives Share Performance (%) Absolute vs. KLCI

1mth -5.2% -2.6%

3mth 0.1% 3.8%

12mth 0.0% -0.5%

Financial Highlights FYE 31 Dec 2009 Turnover 197.0 EBIT 50.9 Pretax profit 52.4 Core Net Profit 44.8 EBIT margin Pretax margin Effective tax rate ROE ROA Net Gearing (x) Core EPS (sen) Core EPS growth PER (x) (%) DPS (sen) Div. Yield (%) NTA/share (RM) Growth ratios Turnover EBIT Pretax profit Core Net profit Share Price Chart 25.9% 26.6% -14.5% 13.8% 9.7% 0.2 8.1 55.2% 24.6 3.20 1.6% 0.6

2010 255.4 83.2 83.1 67.7 32.6% 32.5% -18.5% 18.2% 12.4% 0.1 12.3 51.2% 16.2 3.20 1.6% 0.7

2011 382.3 111.8 106.6 83.9

2012E 403.1 121.2 116.8 92.3

2013E 479.9 143.6 138.2 109.2

29.2% 30.1% 29.9% 27.9% 29.0% 28.8% -21.3% -21.0% -21.0% 16.0% 15.7% 15.9% 12.3% 11.7% 12.3% Net Cash Net Cash Net Cash 15.3 16.8 19.9 23.9% 10.0% 18.3% 13.1 11.9 10.1 5.00 5.03 5.96 2.5% 2.5% 3.0% 1.0 1.1 1.2

54.9% 19.1% 33.6% 55.2%

29.7% 63.5% 58.5% 51.2%

49.7% 34.3% 28.3% 23.9%

5.4% 8.5% 9.6% 10.0%

19.0% 18.5% 18.3% 18.3%

Chiong Tong Chai chiongtc@bimbsec.com.my 03-26918887 ext 175

|1

24 May 2012

Results Review: Dayang 1QFY12

1QFY11 83.4 23.7 22.2 (5.6) 0.0 16.6 16.6 3.0 NC 28.4% 26.6% 20.0% 2QFY11 98.7 32.4 30.2 (5.9) 0.0 24.3 24.3 4.4 NC 32.8% 30.6% 24.6% 3QFY11 101.1 39.1 38.3 (8.0) 0.0 30.3 30.3 5.5 NC 38.6% 37.9% 30.0% 4QFY11 99.1 16.6 15.9 (3.3) 0.0 12.6 12.6 2.3 NC 16.8% 16.0% 12.7% 1QFY12 74.8 19.5 20.2 (4.4) 0.0 15.7 15.7 2.9 NC 26.0% 27.0% 21.0% QoQ -24.5% 17.0% 26.8% 34.7% n.m 24.8% 24.8% 24.8% n.m 54.9% 68.0% 65.2% YoY -10.2% -17.8% -9.1% -20.0% n.m -5.5% -5.5% -5.5% n.m -8.4% 1.2% 5.3% 3MFY12 74.8 19.5 20.2 (4.4) 0.0 15.7 15.7 2.9 NC 26.0% 27.0% 21.0% 3MFY11 83.4 23.1 22.2 (5.6) 0.0 16.6 16.6 3.0 NC 27.7% 26.6% 20.0% YTD Chng -10.2% -17.8% -9.1% -20.0% n.m -5.5% -5.5% -5.5% n.m -8.4% 1.2% 5.3%

Quarterly figures
FY 31 Dec (RMm) Revenue EBIT Pretax profit Taxation Minority Interest Net Profit Core Net Profit EPS (sen) Net gearing (x) EBIT margin (%) PBT margin (%) Net profit margin (%)

Source: BIMB Securities

Income Statement
FY 31 Dec (RMm) Revenue Pretax profit Core Net profit Core EPS (sen) EPS growth (%) DPS (sen) NTA/ share (RM) Net gearing (x) PER (x) P/NTA (x) Net div. yield (%) EV/ EBITDA (x) ROE (%) 2009 197.0 52.4 44.8 8.1 55.2% 3.2 0.59 0.2 24.7 3.4 1.6% 18.8 13.8% 2010 255.4 83.1 67.7 12.3 51.2% 3.2 0.68 0.1 16.3 3.0 1.6% 11.8 18.2% 2011 382.3 106.6 83.9 15.3 23.9% 5.0 0.95 Net Cash 13.2 2.1 2.5% 7.6 16.0% 2012E 403.1 116.8 92.3 16.8 10.0% 5.0 1.07 Net Cash 12.0 1.9 2.5% 6.4 15.7% 2013E 479.9 138.2 109.2 19.9 18.3% 6.0 1.25 Net Cash 10.1 1.6 3.0% 5.2 15.9%

Source: BIMB Securities

Balance Sheet
FY 31 Dec (RMm) Non Current Assets Current Assets Total Assets Current Liabilities Non Current Liabilities Shareholders' Fund Minority Interests Equity & Liabilities 36.8 102.0 323.7 462.6 89.3 85.1 372.7 547.1 101.8 58.4 523.7 683.9 129.0 69.5 587.9 786.4 135.2 66.6 686.9 888.7 2009 325.5 137.1 462.6 2010 216.0 331.1 547.1 2011 291.4 392.5 683.9 2012E 316.2 470.2 786.4 2013E 343.3 545.3 888.7

Source: BIMB Securities

www.bimbsec.com.my

|2

24 May 2012

Results Review: Dayang 1QFY12

DEFINITION OF RATINGS BIMB Securities uses the following rating system: STOCK RECOMMENDATION BUY Total return (price appreciation plus dividend yield) is expected to exceed 10% in the next 12 months. TRADING BUY Share price may exceed 15% over the next 3 months, however longer-term outlook remains uncertain. NEUTRAL Share price may fall within the range of +/- 10% over the next 12 months TAKE PROFIT Target price has been attained. Fundamentals remain intact. Look to accumulate at lower levels. TRADING SELL Share price may fall by more than 15% in the next 3 months. SELL Share price may fall by more than 10% over the next 12 months. NOT RATED Stock is not within regular research coverage. SECTOR RECOMMENDATION OVERWEIGHT The Industry as defined by the analysts coverage universe, is expected to outperform the relevant primary market index over the next 12 months NEUTRAL The Industry as defined by the analysts coverage universe, is expected to perform in line with the relevant primary market index over the next 12 months UNDERWEIGHT The Industry as defined by the analysts coverage universe, is expected to underperform the relevant primary market index over the next 12 months Applicability of ratings The respective analyst maintains a coverage universe of stocks, the list of which may be adjusted according to needs. Investment ratings are only applicable to the stocks which form part of the coverage universe. Reports on companies which are not part of the coverage do not carry investment ratings as we do not actively follow developments in these companies. Disclaimer The investments discussed or recommended in this report not be suitable for all investors. This report has been prepared for information purposes only and is not an offer to sell or a solicitation to buy any securities. The directors and employees of BIMB Securities Sdn Bhd may from time to time have a position in or either the securities mentioned herein. Members of the BIMB Group and their affiliates may provide services to any company and affiliates of such companies whose securities are mentioned herein. The information herein was obtained or derived from sources that we believe are reliable, but while all reasonable care has been taken to ensure that stated facts are accurate and opinions fair and reasonable, we do not represent that it is accurate or complete and it should not be relied upon as such. No liability can be accepted for any loss that may arise from the use of this report. All opinions and estimates included in this report constitute our judgements as of this and are subject to change without notice. BIMB Securities Sdn Bhd accepts no liability for any direct, indirect or consequential loss arising from use of this report.

Published by

BIMB SECURITIES SDN BHD (290163-X) A Participating Organisation of Bursa Malaysia Securities Berhad Level 32, Menara Multi Purpose, Capital Square, No. 8 Jalan Munshi Abdullah, 50100 Kuala Lumpur Tel: 03-2691 8887, Fax: 03-2691 1262 http://www.bimbsec.com.my

Kenny Yee Head of Research

www.bimbsec.com.my

|3