MORNING CALL:18/8/23

Kenanga Research says margin recovery is finally happening for Dialog Group

Transcript

00:00 We're looking at Dialog Group this morning.

00:04 Kenanga Research keeping its outperform rating on the counter with an unchanged target price

00:08 of RM3.10.

00:10 The stock settled yesterday at RM2.16.

00:13 In its note, Kenanga said Dialog's FY23 Connect Profit of RM501m missed its forecast by 6%

00:21 but met consensus estimates.

00:23 Year-to-date earnings declined slightly due to margin compression at the downstream segment.

00:28 On an encouraging note though, fourth quarter FY23 EBITDA margin finally reversed its sequential

00:34 downtrend since the second quarter of FY21.

00:38 Kenanga expects Dialog's midstream business to continue to do well on the back of robust

00:42 rates and utilisation.

00:44 Downstream margins should gradually improve while the ambitious expansion plans at Pengerang

00:49 and Tanjong Langsat remain on track.

00:51 The research house keeping its FY24 earnings forecast unchanged at RM559.5m while introducing

01:00 new FY25 numbers at RM581.6m.

01:05 Quick look at consensus.

01:06 According to Bursa Marketplace data, there are 11 buys, 3 holds and 1 sell.

01:11 Target prices averaging out to RM2.91 which is almost 35% higher than the stock's last

01:17 close of RM2.16.

01:19 Thanks for watching.