KUALA LUMPUR: OSK Research is maintaining its Buy on Dialog Group Bhd at RM1.34 with an unchanged target price of RM1.52.

It said on Wednesday, Feb 10 that Dialog’s 2QFY10 results were within expectations, mainly contributed by the good performance across all divisions, namely engineering and construction, plant maintenance and catalyst handling.

Its net profit rose 6.3% q-o-q and 35.9% YTD on business and margin improvement, riding on the wave of recovery in the global economy and oil price.

"We continue to like Dialog as a defensive O&G stock that pays an attractive dividend yield of about 4%. Maintain Buy," it said.

OSK Research said Dialog’s 2QFY10 results were within consensus and its expectations, making up 51% and 55% of its FY10 forecasts.

The good showing was again attributed to robust performance across all divisions, namely engineering and construction, plant maintenance and catalyst handling. This drove up 2QFY10 net profit by RM28.6m, or 6.3% higher q-o-q, although revenue was 10.8% lower q-o-q to RM275.6m, which indicated that margins improved across divisions following the recovery in oil price.

The 2QFY10 EBIT margin of 10.4% nudged up by 1.1%-pts q-o-q. Dialog also recorded an impressive YTD performance, with both FY10 revenue and net profit surging by 22.6% to RM584.4m and 35.9% to RM55.6m respectively, which was in line with the better operating environment given the recovery in the global economy, which spurred demand for its products and services.