PETALING JAYA: CGS International (CGSI) Research has maintained its “add” rating on Dialog Group Bhd
with an unchanged target price of RM2.46, a 25.5% upside, following stellar financial results for the financial year ended June 30, 2026 (FY26).
Dialog delivered a record core net profit of RM604mil for FY26, surging 43% year-on-year (y-o-y) and fully matching consensus expectations.
In a note, CGSI Research said excluding a one-off RM31mil inventory write-down, fourth-quarter core net profit rose 35% quarter-on-quarter (q-o-q) to RM193mil.
“Total dividends for the year increased to 4.7 sen per share, up from 3.1 sen in FY25, representing a 45% payout ratio,” the research house said.
The performance was driven by higher upstream margins as crude oil prices averaged US$97 per barrel, up 23% q-o-q, alongside stronger downstream contributions from major plant turnaround work at the Kerteh Integrated Petrochemical Complex, and robust project execution.
CGSI Research explained that growth is projected to continue into FY27, backed by new operational assets
These include first contributions from the Cendramas brownfield asset (September 2026) and Baram gas cluster (early 2027), the opening of the 150,000 cubic m storage capacity expansion at Dialog Group’s Langsat 3 facility in September 2026 under a six-year take-or-pay lease, and strong tailwinds for its tank terminal operations as global energy security concerns drive storage demand to stable South-East Asian hubs.
Meanwhile, MBSB Research has taken a more bullish stand, maintaining a “buy” call and setting a higher target price of RM2.57. It adjusted FY27 and FY28 earnings forecasts upward by 5% and 3%, respectively.
Beyond the Langsat 3 project, MBSB Research highlights two major upcoming developments at Pengerang Deepwater Terminals (PDT); 272,000 m3 for Pengerang Biorefinery with targeted completion in first-half calendar year 2028, and the 614,000 cubic m under a long-term agreement with BP Singapore (targeted completion mid-2028), as well as over 202.3 ha reserved for future hub developments.
MBSB Research provides specific timelines for new upstream assets, including first hydrocarbon at the Salbiah gas field by the second quarter of FY27 (2Q27) and ongoing pre-development studies for the RAJA and Mutiara Clusters.
It further states that Dialog’s strategic transition into green infrastructure such as sustainable aviation fuel or SAF storage, biofuel terminals, and the PETRONAS Gas liquified natural gas-driven Air Separation Unit as key long-term catalysts.
Hong Leong Investment Bank (HLIB) Research also maintains a “buy” recommendation on Dialog with a sum-of-parts derived target price of RM2.52.
This represents a potential capital upside of 28.6% over the current trading price of RM1.96, complemented by an expected 2% dividend yield, giving a total expected return of 30.6%.
