Dialog Group Berhad

eyeing on $DIALOG / 7277 (DIALOG GROUP BERHAD)

Titan Trading Notes For Wednesday [19/2/2025]:

KLCI had a slight rebound back towards the 1584 points region with an overall negative market sentiment as we saw over 640 counters closing red for the day. Daily trading volume remains around the 3.6 billion mark, mainly dominated by selling activities.

Main stocks that showed strong buying momentum would be the likes of TECHSTORE, MYEG, DIALOG, CAPITALA, 99SMART, MRDIY, COLFORM, and CIMB. All of which were able to sustain their rallies throughout the day despite the weak market sentiment.

$DIALOG / 7277 (DIALOG GROUP BERHAD) since taking a hit all the way back towards the RM 1.45 support levels 2 days ago, been able to hold well and rebound back towards the RM 1.62+ regions with good volume and buying momentum today.

So far seems to be showing signals that its ripe for a further rebound soon. As long as able to hold above its RM 1.60+ immediate support, could continue to rebound further back towards the RM 1.75+ resistance levels soon in the coming weeks.

Will be monitoring DIALOG closely.

COLFORM on the other hand been able to hold above its RM 0.38+ regions over the past 2 days since its IPO. Despite the weak market sentiment, was able to breakout back towards the RM 0.40 regions with good volume today.

For now looking quite strong here and as long as able to hold above its RM 0.39+ immediate support, could continue towards and beyond its RM 0.41 local high levels soon for a potential bullish continuation.

Will be monitoring COLFORM closely.

$NOTION / 0083 (NOTION VTEC BERHAD) although had a decent breakout back towards the RM 0.97 regions with decent volume this morning, still took a hit and closed back towards the RM 0.93 regions as the whole market sentiment been dragged down.

That said, it announced solid earnings of around RM 12.7 million PAT in its latest quarter. For now looking not too bad here and if able to sustain, could rebound back towards the RM 1+ major resistance levels soon for a further rebound with earnings as a catalyst.

Will be monitoring NOTION closely.

Sharing from remisier

$DIALOG / 7277 (DIALOG GROUP BERHAD)

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*Key takeaways from Dialog (NEUTRAL; TP: MYR1.95)’s results concall:*

♦️ *The EPCC losses recognized in this quarter are mainly led by three external projects* that were awarded during tail-end of COVID-19 pandemic. The total project value is c.MYR800m and these are lump sum turnkey projects. Dialog have recognized all the known expenses in related to supply chain and logistic disruption, project delays and re-fabrication of certain components and do not expect further cost provisions on these projects going forward.

♦️ With that, *Dialog is looking to refocus on internal EPCC projects* and to adopt different contracting strategy (cost-plus instead of lump sum model) for external projects.

♦️ *Normalised JV earnings is still guided to be MYR70-90m/quarter*. Midstream is likely to dominate Dialog’s core earnings at 50-60%, followed by upstream (30-40%) and downstream. Occupancy levels and monthly storage rates for independent terminals are still well sustained, at above 90% and above SGD6/cu m.

♦️ *Further growth is expected within the mid-stream space* including *1. Petronas biofinery plant (FID secured in July-24) with estimated storage capacity of 300k cbm*, *2. Aromatic plant (financing secured with FID in the near term) with estimated 1m cbm capacity* and *3. new phase 3 expansion* (at discussion stage with size unknown). All these three projects could potentially be sealed by 2HCY25. *These projects (project 1 & 2) could contribute at least additional 25% growth* to its mid-stream gross capacity. Dialog would like to offer minority stake to the users as strategic partners.

♦️ The company has also fully impaired its JV investment on rPET plant and malic acid investments and hence, *no further operational losses and impairments are expected going forward*. Dialog is looking to pare down its stake in rPET and scrap off capex spent on malic acid plants.

♦️ New rates for plant turnaround and maintenance contracts have kicked in this year and higher activities are expected in CY25.

$DIALOG / 7277 (DIALOG GROUP BERHAD) qr bomb for write-offs. write off 200mil but mcap gone 2b

opportunity on the fear ?
gas storage biz still recurring around RM 400m p.a.

anyone any thoughts on ong dialog boleh pakai ?

now back to 2017 price

@wsk20 @Ryunanda @terence775 @ricardomilos1021 @FIRLGuys

$DIALOG / 7277 (DIALOG GROUP BERHAD)
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$DIALOG / 7277 (DIALOG GROUP BERHAD)
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$DIALOG / 7277 (DIALOG GROUP BERHAD)
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$DIALOG / 7277 (DIALOG GROUP BERHAD)
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$DIALOG / 7277 (DIALOG GROUP BERHAD)
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$DIALOG / 7277 (DIALOG GROUP BERHAD)
Research by Maybank

Oil and gas (O&G) services provider Dialog Group Bhd together with other Petroliam Nasional Bhd (PETRONAS) suppliers may benefit from United Overseas Bank (M) Bhd’s (UOB) recently launched Sustainable Vendor Financing Programme (SVFP).

KUALA LUMPUR: Dialog Group Bhd has promoted its chief operating officer Mustaffa Kamal Abu Bakar to chief executive officer (CEO) effective Monday.

© New Straits Times Press (M) Bhd

PETALING JAYA: Dialog Group Bhd has promoted its chief operating officer (COO) Mustaffa Kamal Abu Bakar to the position of chief executive officer.

PETALING JAYA: Dialog Group Bhd has promoted its chief operating officer (COO) Mustaffa Kamal Abu Bakar to the position of chief executive officer (CEO).

KENANGA TOP PICKS Q4 2024

Play broadening out. Post US Federal Reserve’s pivot, Malaysia should remain in a sweet spot as a net beneficiary of equity inflows, thanks to stable interest rate, and relatively appealing valuation versus historical norms. Unsurprisingly, recent market interest has largely been in blue chips, but we see broadening out in foreign interests in key sectors beyond the comfort zone of large caps, such as in banks which is somewhat underway.

Overhang removal play. In 4QCY24, we anticipate news on telco overhang removal for mobile network operators, dovetailing into tech plays to be rekindled as data centre ramp up to fit-out stage. Historically October is a quiet month, but we anticipate 4QCY24 to get more vibrant as domestic news flow ramp up, including Budget 2025, for positioning into more volatile names. Externally, sentiment improvement in US stocks is typical after US elections (5th November).

Negatives priced-in play. Sectors such as oil and gas have been unjustifiably de-rated beyond their fundamentals. Also, as value have emerged, we recently upgraded the glove sector on demand-supply rebalancing (tariffs notwithstanding), and automotive sector.

$DAYANG / 5141 (DAYANG ENTERPRISE HOLDINGS BERHAD) $DIALOG / 7277 (DIALOG GROUP BERHAD) $TGUAN / 7034 (THONG GUAN INDUSTRIES BERHAD) $WASEONG / 5142 (WAH SEONG CORPORATION BERHAD) $MKH / 6114 (MKH BERHAD)

PETALING JAYA: Petroliam Nasional Bhd’s (PETRONAS) decision to develop a biorefinery plant in the Pengerang Integrated Complex (PIC) with partners Enilive S.p.A. and Euglena Co Ltd announced in late July is likely to spur the expansion of oil and gas services company Dialog Group Bhd’s tank terminal facilities.

$DIALOG / 7277 (DIALOG GROUP BERHAD)
Research by Public
Outperform - TP RM2.80

"Jubail Supply Base Disposal"

Dialog announced that its indirect subsidiary, Dialog (Labuan) Ltd has entered into an agreement to dispose its entire 60% equity stake in Dialog Jubail Supply Base Company Limited (DJSB) to its existing local partner, Sedres Trading & Maritime Co Ltd (Sedres) for a total cash consideration of SAR47.5m (RM55.0m). Rationale of the disposal is mainly because of changing landscape in the Jubail Port area in which the current services, heavy lifting work is expected to decrease gradually and to only favour normal logistics. This is in tandem with the rollback of capital expenditure (capex) by Saudi Aramco to sustain the production at a maximum of 12 MMbbl/d due to high spare capacity of 3 MMbbl/d. In the recent 4 years, DJSB has contributed about 3-4% to the Group’s net profit. Hence, we cut our FY26/27 earnings forecast by 3.9%/3.7% respectively reflecting the changes as we assume the entity will cease to be a subsidiary from FY26 onwards. Nevertheless, we maintain our Outperform call with unchanged TP of RM2.80 given the disposal is at 1x NBV.

Analyst:
Khairul Fahmi, CFA
khairul.fahmi@publicinvestbank.com.my

$DIALOG / 7277 (DIALOG GROUP BERHAD)
Research by MIDF
Buy - TP RM2.72

"Divesting Away from Saudi Arabia a Strategic Move"

Considering that this agreement has no material impact on the earnings, net assets and net gearing, we make no changes to our forecast projection for Dialog, and maintain our BUY call, with an unchanged target price of RM2.72.

Analyst:
MIDF Research
research@midf.com.my

$DIALOG / 7277 (DIALOG GROUP BERHAD)

$DIALOG / 7277 (DIALOG GROUP BERHAD)
Research by RHB
Buy – TP RM3.09

“Strong Landing; Keep BUY"

Keep BUY with new MYR3.09 TP from MYR2.96, 24% upside and c.2% FY25F (Jun) yield. FY24 results surpassed expectations, with core earnings strengthening by 20% YoY, backed by a ramp-up in Dialog’s domestic and international operations. We see new midstream capacity expansion as long- term growth drivers amidst delivering a strong set of results.

Analyst:
Sean Lim, CFA
sean.lim@rhbgroup.com

$DIALOG / 7277 (DIALOG GROUP BERHAD)
Research by Public
Outperform – TP RM2.80

“Downstream Set for New Dawn"

Excluding one-off items amounting to RM26.7m, Dialog recorded stronger 4QFY24 core net profit of RM165m, higher by 43.2% YoY and 2.0% QoQ. The stronger result is mainly attributed to the increased production from upstream activities in Malaysia with the revenue from the domestic segment increasingly significantly by 52.3% YoY and 19.7% QoQ. Overall, Dialog recorded full year FY24 core net profit of RM610.6m, broadly in-line with our and consensus estimates at 103%. Moving forward, we expect Dialog to start FY25 on a clean slate without loss-making legacy EPCC projects as we understand that it has been completed by June 2024. Downstream-based earnings could also be lifted by new tariff revision on its Master Service Agreement (MSA) with PETRONAS, starting from July 2024. Further upside could be captured if Dialog is able to secure new tank expansion from Pengerang Deepwater Terminal site. All said, we revise our earnings forecast slightly higher by 4-5% for FY25F-26F and upgrade our call to Outperform with higher TP of RM2.80 (from RM2.61).

Analyst:
Khairul Fahmi, CFA
khairul.fahmi@publicinvestbank.com.my

$DIALOG / 7277 (DIALOG GROUP BERHAD)
Research by MIDF
Buy – TP RM2.72

“Steady Earnings Throughout FY24"

• FY24 normalised earnings up +13%yoy, slightly below estimates
• Upstream and midstream segments showed better performance, but downstream saw delays, cost overruns
• Geopolitics and favourable Brent benefits upstream EPCC, storage farms; but downside risks higher operational cost remain
• Maintain BUY with unchanged of TP: RM2.72

Analyst:
MIDF Research
research@midf.com.my

$DIALOG / 7277 (DIALOG GROUP BERHAD)
Research by Maybank
Buy – TP RM3.16

“4Q24: Strong quarter; FY25E to be a new growth chapter"

Dialog’s 4QFY24 results came in broadly in line at the upper range of our forecasts. Post-updates of full-year figures, our FY25-26E earnings are tweaked by +1%/+1% respectively, and we introduce FY27E net profit of MYR760m. Our SOP-TP is marginally reduced to MYR3.16 (from MYR3.17). Dialog remains our top BUY . We continue to like Dialog for its operational/ financial stability from its dedicated midstream tank terminal assets.

Analyst:
Jeremie Yap
jeremie.yap@maybank-ib.com

$DIALOG / 7277 (DIALOG GROUP BERHAD)
Research by Kenanga
Outperform – TP RM3.37

“Recovery Turning to High Gear"

DIALOG's results beat expectations for the second time in FY24 due to the strong performance of is specialist product segment. Its FY24 core net profit was driven by lower finance costs and improvement in specialist product top line. Its earnings remain on an upward trajectory, underpinned by improving EPCC margins as cost pressures ease. We raise our FY25F net profit forecast by 5%, lift our TP by 4% to RM3.37 (from RM3.23) and maintain our OUTPERFORM call.

Analyst:
Lim Sin Kiat, CFA
limsk@kenanga.com.my

$DIALOG / 7277 (DIALOG GROUP BERHAD)
Research by HLIB
Buy – TP RM3.04

“Looking forward to a stronger FY25"

Dialog reported 4QFY24 core earnings of RM165.1m (+1.9% QoQ, +45.1% YoY), bringing FY24 core net profit to RM610.7m (+20.7%). The results were within ours and consensus estimates. Core earnings rose marginally QoQ (+1.9%) thanks to recovery in share of JV and associates due to absence of forex losses incurred in 3QFY24. We remain optimistic that Dialog is on track to turnaround its downstream businesses in FY25. As loss making EPCC contracts are mostly completed alongside renewed rates for its 5-year MSA with Petronas since mid-CY24, we expect Dialog to record stronger earnings in the coming quarters. Maintain our forecasts and BUY call on Dialog with unchanged SOP-derived TP of RM3.04.

Analyst:
Brian Chin
brianchy@hlib.hongleong.com.my