DIALOG (7277) : RHB Research maintains Buy on Dialog Group
KUALA LUMPUR: RHB Research has maintained its Buy on Dialog Group with a target price of RM2, it said in a note on Monday.
"While the stock will be increasingly driven by offshore developments, we believe current levels do not reflect its defensive nature in its locational advantage and concession-nature of its tank terminal/ logistic business. Risk to our valuation would be worse-than-expected costs, as thecompany is in the midst of an expansion.
"We are positive on the green light received by Dialog to develop a keyphase of its mega Pengerang Terminal project - dedicated for LNG storage, trading and supply to the requirements of the Pengerang Integrated Complex.
"We don’t expect any impact to our three-year earningsforecast, given its long development period," it said.
On its Pengerang Terminal project, RHB said this is another positive development for Dialog’s long-termrecurring income stream, as it marks at least two out of three of its key phases for the mega Pengerang Terminal projects that have been given the green light.
"The third phase, in which the company expects to see full development by mid-2018, will be similar to PLNG-2 in the sense thatboth are dedicated for the Refinery And Petrochemical Integrated Development (RAPID).
"Nonetheless, given the long development period, we do not expect significant earnings accretion until late 2017 (FY18)," it said.
http://www.thestar.com.my
KUALA LUMPUR: RHB Research has maintained its Buy on Dialog Group with a target price of RM2, it said in a note on Monday.
"While the stock will be increasingly driven by offshore developments, we believe current levels do not reflect its defensive nature in its locational advantage and concession-nature of its tank terminal/ logistic business. Risk to our valuation would be worse-than-expected costs, as thecompany is in the midst of an expansion.
"We are positive on the green light received by Dialog to develop a keyphase of its mega Pengerang Terminal project - dedicated for LNG storage, trading and supply to the requirements of the Pengerang Integrated Complex.
"We don’t expect any impact to our three-year earningsforecast, given its long development period," it said.
On its Pengerang Terminal project, RHB said this is another positive development for Dialog’s long-termrecurring income stream, as it marks at least two out of three of its key phases for the mega Pengerang Terminal projects that have been given the green light.
"The third phase, in which the company expects to see full development by mid-2018, will be similar to PLNG-2 in the sense thatboth are dedicated for the Refinery And Petrochemical Integrated Development (RAPID).
"Nonetheless, given the long development period, we do not expect significant earnings accretion until late 2017 (FY18)," it said.
http://www.thestar.com.my
