KUALA LUMPUR (Feb 15): AmResearch is maintaining its Buy call on Dialog Group with an unchanged sum-of-parts derived fair value of RM2.85 a share.
It said on Wednesday its fair value implied a CY12F PE of 30 times, above its three-year average of 25 times but below its peak of 40 times in 2007.
“Dialog’s 1HFY12 net profit of RM86 million (+25% on-year) came in within expectations, accounting for 42% of our and street’s estimates.
“For comparison, 1HFY11 accounted for a slightly higher 45% of FY11 net profit. We expect a stronger 2HFY12 contribution from Dialog’s engineering and procurement division as the land reclamation for the Pengerang Phase 1 tank terminal is scheduled for completion by June this year,” it said.
AmResearch said additionally, the pace of earnings recognition for its tank terminal operations is expected to accelerate as the 76,000 cu metre-Tanjung Langsat Terminal 1 phase 3 was completed in August 2011 while 171,000 cu metre-Langsat Terminal 2 was completed in December last year.
“We remain positive about the group’s expanding recurring earnings profile. The stock currently trades at an attractive CY12F PE of 26 times, below its 2007 peak of 40 times,” said the research house.
It said on Wednesday its fair value implied a CY12F PE of 30 times, above its three-year average of 25 times but below its peak of 40 times in 2007.
“Dialog’s 1HFY12 net profit of RM86 million (+25% on-year) came in within expectations, accounting for 42% of our and street’s estimates.
“For comparison, 1HFY11 accounted for a slightly higher 45% of FY11 net profit. We expect a stronger 2HFY12 contribution from Dialog’s engineering and procurement division as the land reclamation for the Pengerang Phase 1 tank terminal is scheduled for completion by June this year,” it said.
AmResearch said additionally, the pace of earnings recognition for its tank terminal operations is expected to accelerate as the 76,000 cu metre-Tanjung Langsat Terminal 1 phase 3 was completed in August 2011 while 171,000 cu metre-Langsat Terminal 2 was completed in December last year.
“We remain positive about the group’s expanding recurring earnings profile. The stock currently trades at an attractive CY12F PE of 26 times, below its 2007 peak of 40 times,” said the research house.
