Dayang Share Price Plummets Despite Firm Oil Prices
Dayang Enterprise Holdings Bhd (KL:DAYANG), an oil and gas service provider in Sarawak, has seen its share price fall by about 25% from its peak of RM2.08 to around RM1.57 over the past few months.
This decline is unusual because most oil and gas counters tend to move in tandem with crude oil prices. However, higher oil prices have led upstream operators to maximize production from existing platforms, delaying maintenance activities that are crucial for Dayang's business.
The group has been a strong cash generator, producing more than RM300 million in free cash flow annually over the past three years. If it can sustain this level this year, its free cash flow yield will be about 16.5% at the current market value.
Despite the weaker outlook for 2026 due to delayed maintenance activities, Dayang's existing order book provides some cushion, with an order book of around RM4.8 billion providing earnings visibility for the next four to five years.