Thursday, December 15, 2011

CIMB Research maintains Outperform on Dialog, target RM3.64

KUALA LUMPUR (Dec 15): CIMB Equities Research is maintaining its Outperform call on DIALOG GROUP BHD [] and continue to value the stock at its sum-of-parts, which does not factor in the new marginal fields.

The research house has a long-term Outperform on Dialog and an unchanged target price of RM3.64.

CIMB Research said it was upbeat on Dialog's ambitious plan to bid for two to three more marginal field developments in CY12 after securing the 15-year Balai contract in Aug 11 together with Petronas Carigali and Australia-based Roc.

'The development cost for a marginal field is around US$500 million to RM1 billion and we understand that Dialog is vying for at least a 30% equity stake,' it said.

CIMB Research said the management assured that it will not make any more cash calls to finance its marginal field venture other than the ongoing rights issue.

'Slated for completion in February 12, the right issue is expected to raise around RM500 million. As at end-Sept 2011, Dialog had RM92 million (4.6 sen/share) net cash,' it said.

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