Thursday, December 2, 2010

OSK Research maintains TP for Dialog at RM1.47

KUALA LUMPUR: OSK Research is maintaining its'' target price for DIALOG GROUP BHD [] at RM1.47 based on a sum-of-parts valuation following the latest corporate development involving the acquisition of Fitzroy Engineering Group Limited (FEGL) for a total cash consideration of NZ$13.5 million (RM31.7m).

'We understand that FEGL has been generating an average net profit of about NZ$3 million (RM7 million) over the past three years. This amount is of course immaterial compared to our net profit forecast for Dialog of about RM139 million and RM149 million for FY11 and FY12 respectively.

'Given that the earnings contribution for Dialog's FY11 is immaterial as announced, we are keeping our FY11-12 earnings unchanged for now,' it said on Thursday, Dec 2.

The acquisition of FEGL to strengthen and enhance its fabrication business in the O&G and petrochemical industries. This would also enable it to penetrate into the New Zealand and Australian markets.

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