OCBC downgrades Dyna-Mac after recent share price surge

But it might clinch more contracts in the near future.

OCBC investment research has downgraded mainboard-listed Dyna-Mac holdings on back of its recent price surge.

Dyna-Mac’s share price has appreciated 14.5% since August 18, leading OCBC to conclude that total returns are now limited at 6.9%.

However, OCBC also noted that the firm is poised to clinch more contracts following recent FPSO order wins by its key customers such as Bumi Armada Berhad and BW Offshore.

“Dyna-Mac stands a strong chance to secure contracts for the engineering, procurement and construction (EPC) work of the topside modules, in our view. Although crude oil prices have dipped recently, we remain positive on the long-term outlook on the oil and gas sector. SBM Offshore, currently the largest FPSO player globally, estimates that there would be 12 and 13 FPSO awards in 2014 and 2015, respectively,” noted OCBC.