PETALING JAYA: Dialog Group Bhd
’s pipeline of maiden revenue-generating assets and tank expansion projects are expected to bring a multi-year growth phase in its financial year 2027 (FY27) and FY28, and a potential rerating for the stock.
In a note to clients, Maybank Investment Bank Research (Maybank IB) said Dialog remains its top pick for the sector.
Upcoming project deliveries and upstream field timelines are key growth engines, while its midstream tank assets provide steady cash flow, according to the research house.
“We continue to like Dialog for its recurring income portfolio and cash flow stability from its midstream tank terminal assets,” it said.
Dialog provides integrated technical services across the upstream, midstream and downstream oil and gas as well as petrochemical sectors.
Maybank IB estimated that the group’s midstream segment, which includes tank terminal and supply-base infrastructure, to contribute over 50% of its annual profits in FY26-FY28.
For FY27, the research house listed four new profit growth drivers for Dialog, such as a 150,000 cubic-metre renewable fuel tank for EcoCeres, a liquefied natural gas-driven air separation unit facility project with PETRONAS Gas for Regas terminal, first gas production from the Baram junior cluster, and increase in downstream onshore plant turnaround activities.
Furthermore, two tanks are set to come online in FY28, namely the expansion of a 272,000 cubic-metre tank storage for Pengerang Biorefinery (a joint-venture between PETRONAS, Eni and Euglena), and a 614,000 cubic-metre tank storage for BP Singapore.
“Dialog still has a total of 660 acres of vacant land in Pengerang for further tank terminal expansion,” Maybank IB said.
“However, given the current pipeline of projects, we do not anticipate any more tank terminal jobs in the next six months.
“The next 12 months will be key for Dialog – to prove their capability to execute and deliver these projects within the expected timeline.”
The research house said the company is also actively expanding into sustainable and renewable energy solutions, including circular-economy initiatives, in response to global energy transition trends.
It noted that average selling price, capacity and operating expenditure are key earnings drivers for Dialog’s tank terminal operations, and variation of these parameters will likely affect profitability.
Maybank IB added that the company would undergo a high capital expenditure cycle in FY26-FY28, despite achieving net cash in FY25.
“Execution of planned tank terminals and regasification facilities will drive future earnings growth.”
It maintained its “buy” call on the stock with a target price of RM2.21.
