KUALA LUMPUR (Aug 17): RHB Research Institute Sdn Bhd and Public Investment Bank Bhd had today raised their target prices (TPs) for Dialog Group Bhd shares to RM4.13 and RM3.73 respectively after Dialog said net profit rose to RM114.85 million in the fourth quarter ended June 30, 2018 (4QFY18) from RM103.55 million a year earlier.
For the full year, Dialog said yesterday net profit grew to RM510.37 million from RM370.64 million a year earlier. At Bursa Malaysia today, Dialog shares settled at RM3.39 at 12:30pm.
RHB wrote in a note: "Maintain BUY. We maintain our earnings forecasts, but lift our SOP (sum-of-parts)-based TP to RM4.13 from RM3.92, as we roll forward our valuation to FY20. We continue to like the company for its resilient earnings, which stems from recurring income from multiple tank terminals. Dialog is also the largest KLCI proxy to the local mid-downstream oil & gas services industry. It remains one of our top sector picks, as well."
Public Investment said in a note that the research firm had also cut its Dialog earnings forecast.
"We cut our FY19/20 forecasts by -18.7% on average, to better reflect contributions from its PDT (Pengerang Deepwater Terminal) assets, with net profit numbers now at RM464.2 million and RM542.3 million respectively, translating to a growth of 9.1% and 16.8%. We upgrade our call to Outperform however on the back of its solid fundamentals, with a higher TP of RM3.73 after rolling-over our sum-of-parts valuation to FY20," it said.