MORNING CALL:10/8/23

Kenanga Research said it came away from a meeting with Dialog feeling largely optimistic

Transcript

00:00 In the spotlight this morning is Dialogue Group.

00:04 Kenanga Research said it came away from a meeting with a company feeling largely optimistic.

00:09 It maintained its outperform rating and target price of RM3.10.

00:13 The stock ended trading yesterday at RM2.27.

00:17 Here's why Kenanga is upbeat on Dialogue.

00:20 For starters, it's tech farm business, which is boosted by new business from Australian

00:24 and New Zealand importers.

00:26 We're talking high utilisation rates exceeding 90%, plus spot rates for its independent terminals

00:33 are currently robust at above $6 Singapore dollars per cubic metre.

00:37 Margins for downstream contracts are expected to remain stable and gradually improve from

00:42 FY25.

00:44 According to Kenanga, Dialogue will incorporate higher pricing for its new contracts to reflect

00:49 the current challenging environment.

00:51 Meanwhile, its major expansion plans in Pengerang and Tanjong Langsat remain on track, escorting

00:57 customers to enter into long-term off-take agreements for Pengerang Energy Complex.

01:02 The company is also confident that it will be able to secure new customers to off-take

01:07 capacity at Tanjong Langsat Terminal Phase 3.

01:11 Now according to Bloomberg data, it mostly buys on Dialogue.

01:15 12 to be exact, 2 holes and 1 cell.

01:18 Contract prices average out to RM2.91, which is about 28% higher than the counter's last

01:24 close of RM2.27.

01:26 -