Dialog upgraded to Outperform on solid fundamentals


The research firm believes that Dialog is likely to proceed with a further expansion of its tank terminal capacity of 1.2m cu m gradually (expected to start in 2022) as demand for petroleum products and crude oil storage space would be strong upon completion of the many petrochemical facilities in the area.

KUALA LUMPUR: Public Invest Research upgraded Dialog Group Bhd to Outperform with a higher sum-of-parts derived target price of RM3.73 on the back of its solid fundamentals.

Dialog’s FY18 net profit jumped to RM510.4mil, a 37.7% increase year-on-year despite reporting a lower revenue of RM3.11bil.

Stripping off the fair value gain on the disposal of a jointly controlled entity of RM65.6mil and other exceptional items, Dialog’s core net profit stood at RM425.7mil, increasing by 14.1% y-o-y. 

The research house said on Friday that the group’s performance, however, had come in below its expectations at 80% of full-year estimates due to its over-estimation on its Pengerang Deepwater Terminal (PDT) contributions.

“That said, the Group’s earnings outlook remains intact moving forward attributable to higher contributions from Langsat and PDT terminals,” it said.

The research house cut its FY19/20 forecasts by 18.7% on average, to better reflect contributions from its PDT assets, with net profit numbers now at RM464.2mil and RM542.3mil respectively, translating to a growth of 9.1% and 16.8%.
 

   

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