Wednesday, November 22, 2017

FW: AmBank Research - Dialog Group : Boost from Tanjung Langsat revaluation BUY, 22 Nov 2017- Part 1

 

 

STOCK FOCUS OF THE DAY         

Dialog Group : Boost from Tanjung Langsat revaluation                                                  BUY

 

We reiterate our BUY recommendation on Dialog Group with an unchanged sum-of-parts-based (SOP) fair value of RM2.75/share, which implies a CY18F PE of 37x – 20% below its 5-year average of 46x. Our valuation includes a 300,000 m3 expansion of storage facilities in Tanjung Langsat and valuation of the 650-acre buffer land value in Pengerang at RM70 psf. We have fine-tuned Dialog’s FY18F-FY19F earnings as 1QFY18 core net profit of RM95mil came in largely within expectations, accounting for 24% of our and consensus’ FY18F earnings vs 18%-24% for the past five first quarters of FY13-FY17. The group did not declare any interim dividend, as expected.

 

Dialog’s 1QFY18 core net profit rose 50% YoY from higher progress work recognition for Pengerang Deepwater Terminal (PDT) Phase 2 and increased associate contributions from Pengerang Phase 1. However, on a QoQ comparison, 1QFY18 core net profit slid 8% due to lower progress work from PDT Phase 2 and reduced contributions from its Singapore operations, ANZ and the Middle East. Currently, Dialog is trading at a CY18F PE of 30x, below its 5-year peak of 46x. We view the premium as justified given Dialog’s long-term recurring cash flow-generating businesses, which are largely cushioned from volatile crude oil price cycles, and further underpinned by the Pengerang development’s multi-year value re-rating bonanza.

 

 

Others :

Hock Seng Lee : Bags RM56.5mil X-FAB building job                                                          BUY

IJM Corp : Investing in RM500mil office building in TRX                                                   BUY

Tune Protect : Improving take-up rate for travel insurance                                           BUY

Yinson Hldgs : Finalising Ghana FPSO minor stake sale at US$117mil                           BUY

Heineken Malaysia : A more exciting FY18                                                                            HOLD

Inari Amertron: Further earnings upsurge expected in 2Q                                             HOLD

Malakoff : Core earnings dragged by SEV’s step-down in capacity income             HOLD

Press Metal: 9MFY17 results disappoint as ASP falls short                                              HOLD

 

 

 

 

NEWS HIGHLIGHTS

Property Sector : Johari: No U-turn on luxury property project freeze

Denko : Inks deal for RM1.19b merger with rival IMS

Daya Materials : Subsidiary wins RM124mil factory expansion job

Palette Multimedia : Creador’s Brahmal now a substantial shareholder

 

 

 

DISCLAIMER:

The information and opinions in this report were prepared by AmInvestment Bank Bhd. The investments discussed or recommended in this report may not be suitable for all investors. This report has been prepared for information purposes only and is not an offer to sell or a solicitation to buy any securities. The directors and employees of AmInvestment Bank Bhd. Bhd may from time to time have a position in or with the securities mentioned herein. Members of the AmBank Group Bhd and their affiliates may provide services to any company and affiliates of such companies whose securities are mentioned herein. The information herein was obtained or derived from sources that we believe are reliable, but while all reasonable care has been taken to ensure that stated facts are accurate and opinions fair and reasonable, we do not represent that it is accurate or complete and it should not be relied upon as such. No liability can be accepted for any loss that may arise from the use of this report. All opinions and estimates included in this report constitute our judgment as of this date and are subject to change without notice.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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