OSK Research and Affin Investment Bank yesterday retained their buy recommendations on Dialog Group Bhd and maintained their target prices for the counter after it said it was teaming up with Vopak Asia Pte Ltd to study the feasibility of developing an independent deepwater storage terminal for oil products in Pengerang, Johor.
If the findings were positive, the JV would partner with the Johor state government and state secretary, to develop the terminal. The terminal will be a tank facility for storing and distributing crude oil and petroleum products, with port facilities capable of handling very large crude carriers (VLCCs), OSK said. Pengerang, located at the southern tip of Johor, is close to international shipping routes and Singapore’s international petroleum hub.
OSK kept its target price unchanged at RM1.32, based on FY2010 sum-of-parts (SOP) valuation. Affin too kept its SOP-derived target price for Dialog unchanged at RM1.16, but estimated that the proposed Pengerang deepwater petroleum terminal could potentially add 42 sen to its existing SOP-valuation.
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