Saturday, April 26, 2014

Dialog - Current PER Is at 34x !!!

It is trading at a premium to their three year average (24 April 2014).

Its next catalyst could be the development of the billions Pengerang project in Johor given that the management is in talks with potential investors for subsequent phases of the Pengerang Terminal and signing up of more off takers.

Its current PER is 34 times however its peers’ PE ranges from 20 to 64 times with Petra Energy having the highest PE of 64 times.

The company’s Pengerang Independent Terminal announced its first shipment from the petroleum and crude storage facility.

As Petronas final investment decision for the RAPID project has been approved, expects the construction plans for phases 2 and 3 to be expedited over the next few months from April 2014 depending on negotiations with customers.

The stock is trading at a 28 times PE of CY2015F which is a 40% premium on its three year average of 20 times.

Dialog will also benefit from long term recurring income once the terminal’s tank facilities are fully operational.

It is currently (April 2014) in talks with potential investors for subsequent phases of the Pengerang Terminal.

At the meantime, Dialog will continue to invest in upstream ventures, to create robust platforms that will generate long term sustainable income for the company.

Dialog’s risks include O&G prices fluctuations, demand for O&G and off takers committed to sealing long term contracts.

Dialog intends to challenge the claims by Tanjung Langsat Port Sdn Bhd of rm546 million which makes up 37.5% of Dialog’s equity as of Dec 2013.

Dialog is in a net debt position of rm398 million.

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Please note that all data given are merely blogger's opinion. It is strongly recommended that you do your own analysis and research before investing.