Maiden profit contributions from the construction of the Pengerang terminal in 2H will push Dialog’s full-year earnings to our forecast of record earnings. This is why we consider 1Q earnings to be in line even though it made up only 18% of our full-year number.
Our SOP-based target price rises as we roll it forward. We now apply our 12.6x CY13 target market P/E of 12.6x instead of CY12 P/E of 14.5x but continue to value the businesses at a 40% premium. Maintain OUTPERFORM as earnings upgrades by the market are in store.
We advise investors to accumulate the stock. Dialog is a big ETP winner, having secured the Pengerang contract and the Balai marginal field development. Worth up to US$950m, the Balai job adds to Dialog's earnings visibility and gives the company another steady stream of earnings after three tank terminal concessions in Kertih (20 years effective 2000), Tanjung Langsat (30 years effective 2010) and Pengerang (60 years effective 2011) and a supply base in Jubail, Saudi Arabia.
Our SOP-based target price rises as we roll it forward. We now apply our 12.6x CY13 target market P/E of 12.6x instead of CY12 P/E of 14.5x but continue to value the businesses at a 40% premium. Maintain OUTPERFORM as earnings upgrades by the market are in store.
We advise investors to accumulate the stock. Dialog is a big ETP winner, having secured the Pengerang contract and the Balai marginal field development. Worth up to US$950m, the Balai job adds to Dialog's earnings visibility and gives the company another steady stream of earnings after three tank terminal concessions in Kertih (20 years effective 2000), Tanjung Langsat (30 years effective 2010) and Pengerang (60 years effective 2011) and a supply base in Jubail, Saudi Arabia.
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