DIALOG (7277) : CIMB Research advises investors to accumulate Dialog
KUALA LUMPUR: CIMB Equities Research has advised investors to accumulate Dialog Group Bhd shares as the oil and gas services related company embarks on another long-term venture that complements its earlier tank terminal investments in Kertih and Tanjung Langsat.
It said on Monday Dialog is by far the biggest winner of oil & gas investments under the government's Economic Transformation Programme through its involvement in both downstream (Pengerang tank terminal) and upstream (risk service contracts and enhanced oil recovery).
CIMB Research said with Phase 1 of the Pengerang tank terminal complex nearing completion, Dialog is stepping on the gas with Phase 2 where it will develop LNG regasification facilities with Petronas Gas and the Johor state government in a project that will cost an estimated RM2.7bil.
“We understand that Dialog will also be involved in the construction of selected structures. Pending further details, we maintain our forecasts and continue to value the stock at 21.2 times CY16 P/E, a 30% premium over our target market P/E of 16.3 times. Pengerang’s attractive outlook is the potential re-rating catalyst that supports our Add call,” it said.
To recap, Dialog has inked an agreement with Petronas Gas to build liquefied natural gas (LNG) regasification facilities comprising a regasification unit and two 200,000 sq metres LNG storage tanks in Pengerang, Johor.
Costing an estimated RM2.7bil, the project will be undertaken by Petronas Gas (65%), Dialog (25%) and the Johor state government (10%). The financing structure is yet to be determined.
Phase 1A has received no less than 50 crude oil shipments since the first shipment on April 12, 2014. Phase 1B (petroleum products) is also in operations while the construction of Phase 1C (crude oil) is nearing completion.
As Dialog is not specialised in the construction of LNG storage tanks, the task will be undertaken by a foreign company. Dialog, however, will be involved in the construction of structures such as jetties.
“We understand that Phase 2 is slated to be operational by October 2017,” it said.- The Star
KUALA LUMPUR: CIMB Equities Research has advised investors to accumulate Dialog Group Bhd shares as the oil and gas services related company embarks on another long-term venture that complements its earlier tank terminal investments in Kertih and Tanjung Langsat.
It said on Monday Dialog is by far the biggest winner of oil & gas investments under the government's Economic Transformation Programme through its involvement in both downstream (Pengerang tank terminal) and upstream (risk service contracts and enhanced oil recovery).
CIMB Research said with Phase 1 of the Pengerang tank terminal complex nearing completion, Dialog is stepping on the gas with Phase 2 where it will develop LNG regasification facilities with Petronas Gas and the Johor state government in a project that will cost an estimated RM2.7bil.
“We understand that Dialog will also be involved in the construction of selected structures. Pending further details, we maintain our forecasts and continue to value the stock at 21.2 times CY16 P/E, a 30% premium over our target market P/E of 16.3 times. Pengerang’s attractive outlook is the potential re-rating catalyst that supports our Add call,” it said.
To recap, Dialog has inked an agreement with Petronas Gas to build liquefied natural gas (LNG) regasification facilities comprising a regasification unit and two 200,000 sq metres LNG storage tanks in Pengerang, Johor.
Costing an estimated RM2.7bil, the project will be undertaken by Petronas Gas (65%), Dialog (25%) and the Johor state government (10%). The financing structure is yet to be determined.
Phase 1A has received no less than 50 crude oil shipments since the first shipment on April 12, 2014. Phase 1B (petroleum products) is also in operations while the construction of Phase 1C (crude oil) is nearing completion.
As Dialog is not specialised in the construction of LNG storage tanks, the task will be undertaken by a foreign company. Dialog, however, will be involved in the construction of structures such as jetties.
“We understand that Phase 2 is slated to be operational by October 2017,” it said.- The Star
