Investment Banks Positive On Dialog, With Higher Earnings Forecast For FY2025

KUALA LUMPUR, Aug 16 (Bernama) -- Kenanga Investment Bank Bhd has raised Dialog Group Bhd's earnings forecast for the financial year ending June 30, 2025 (FY2025) by five per cent factoring in stronger revenue for the specialist product division.

In a note today, the investment bank said Dialog's results exceeded expectations for the second time in FY2024 due to the strong performance of its specialist product segment, with its core net profit bolstered by lower finance costs and improvement in the segment's product top line.

Kenanga pointed out that the integrated technical service provider for the oil, gas and petrochemical industries is on an upward earnings trajectory, driven by improved rental rates for its independent terminals and enhanced performance in the upstream segment, particularly in production.

"In the coming quarters, its engineering, procurement, construction and commissioning (EPCC) and plant maintenance division is expected to return to profitability as new contracts are recognised, reversing losses in FY2024.

"Additionally, Dialog has embarked on a renewable fuel product storage business, expanding its existing Tanjung Langsat complex to meet the growing demand for renewable fuel storage," it said. 

Kenanga maintained its 'outperform' call for Dialog and raised its target price (TP) by four per cent to RM3.37, up from RM3.23 previously.

Meanwhile, Public Investment Bank Bhd upgraded its stance on Dialog to 'outperform' with a higher TP of RM2.80 compared to RM2.61 previously. 

The investment bank expects Dialog to start FY2025 on a clean slate, free from loss-making legacy EPCC projects, which have been completed by June 2024.

As of 12.30 pm, Dialog's share price had eased one sen to RM2.48 with 2.76 million shares traded. 

-- BERNAMA