Eye On Stocks

THE oil and gas sector has seen a flurry of activity, stoked by newsflow from the Economic Transformation Plan and Petronas' high capital expenditure, which may hit RM40bil this year. On the back of this, analysts are expecting Dialog Group Bhd to turn in record net profits for its year ending June 30, 2011.

The announcement of Dialog's RM5bil Pengerang terminal project in partnership with the Johor government and Vopak in January indicates that the construction of the 5 million cu m terminal is set to commence in mid-2011 as scheduled.

Also, the entire southern Johor region is expected to add up to 10 million cu m of tank terminal capacity, including Tanjung Bin and the Port of Tanjung Pelepas.

“With Dialog's excellent track record in constructing and delivering the past two projects in Kertih and Tanjung Langsat, we expect the group to be a strong contender for orders of up to RM10bil,” said AmResearch.

CIMB has raised its target price from RM2.20 to RM2.70 to include concession earnings from the terminals in Kertih, Tanjung Langsat and Pengerang, and recurring income from the Jubail supply base.

Dialog's recent contract included a RM65mil contract to provide EPCC works for a new Bintulu cooling tower for Asean Bintulu Fertilizer Sdn Bhd could raise the group's existing secured orders by 13% to RM600mil.

CIMB has a profit forecast of RM149.5mil, while AmResearch is forecasting the company to turn in RM143.5mil in net earnings. - By Tee Lin Say

source:thestar