STOCK FOCUS OF THE DAY
Dialog Group: Multi-year strategic Pengerang bonanza BUY
We reiterate our BUY recommendation on Dialog Group with a higher sum-of-parts-based (SOP) fair value of RM3.20/share (from an earlier RM2.75/share), which implies an FY19F PE of 40x — 5% below its 5-year average of 46x. Even though Dialog’s share price has continually outperformed the FBM KLCI by 50% last year and achieved our fair values multiple times, we maintain our conviction that the stock’s multi-year re-rating process remains intact.
While our earnings forecasts are unchanged, we have raised Dialog’s SOP, partly with the inclusion of a 373-acre reclaimable land in Pengerang at RM50 psf. This is the balance of the total reclaimable land of 680 acres following the completion of Pengerang 1 (150 acres) and Pengerang Phase 2 (157 acres) by 2019. Currently, 133 acres of the additional land have already been reclaimed, with a total reclaimed area of 440 acres to date. We have also rolled forward our PE multiples from CY18F to FY19F for the group’s specialist/technical/maintenance services, with higher targets at 25x from 18x earlier.
Others :
LPI Capital: Stable core earnings with healthy combined ratio HOLD
Plantation Sector: Inventory up 7% MoM in December NEUTRAL
QUICK TAKE
Tan Chong Motor: To build and sell buses in Vietnam HOLD
STOCKS ON RADAR
Pantech Group, Frontken Corp., AppAsia, Cepatwawasan Group
ECONOMIC HIGHLIGHT
China: Cooling PPI constrains CPI pricing power
NEWS HIGHLIGHTS
MyEG: Gets nod to issue electronic money
Goldis: To complete privatisation of IGB in March
Kim Teck Cheong: KTC units secure five distributorships
BCorp: Eyes 3%-5% growth in retail segment
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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