Dayang

Value Investing Case Study 07-4. I first covered Dayang in Dec 2020. That analysis was based on the Annual Reports till 2019. This is an updated fundamental analysis and valuation incorporating the FYE 2022 results. 

When I first wrote about Dayang Enterprise Holdings Berhad (Dayang or the Group) in Dec 2020, it was trading at RM 1.24 per share. The market price has since increased to RM 1.92 per share (as of 3 Nov 2023). 

• For FYE Dec 2020, Dayang made about RM 0.05 per share. This is equal to a PE ratio of 25.  Based on the LTM performance, the Group would make RM 0.10 per share for FYE 2023. This is about a PE ratio of 19.

• In Dec 2020, Brent crude oil was trading around USD 48 per barrel compared to the early Nov 2023 price of USD 85 per barrel. 

Why has the PE ratio dropped from 25 to 19? Is the market projecting that the high crude oil prices will not hold and expect Dayang's performance to deteriorate accordingly? 

I have an detailed analysis of Dayang here.