BIMBSec - Dayang Initial Coverage - 020412

We are initiating coverage on Dayang with a Buy call. Our target price of RM2.59 is based on a PE of 14.5x. With strong business presence within the niche topside maintenance (TSM) and hook-up and commissioning (HUC) activities, the Group continues to enjoy strong recurring income with orderbook of RM1.4bn likely to be boosted further this year in view of upcoming mega tenders. Potential M&A activities which are justifiable by the Group’s strong financial position would escalate business diversification and act as re-rating catalyst.