KUALA LUMPUR: Maybank IB Research has raised Dialog Group Bhd’s financial year 2018 to 2020 earnings forecasts by four per cent per annum, following the capacity expansion of Dialog’s two tank terminal facilities – Tanjung Langsat and Pengerang.
In a research report today, Maybank IB said the company is already on a progressive capacity expansion drive – both green and brownfield facilities – and its land there will be tapped to realise this aspiration.
Besides that, Maybank IB said it is positive on Dialog’s recent venture with Johor Corporation (JCorp) to lease two parcels of land at Tanjung Langsat on a 30-year lease for RM62 million and to acquire JCorp’s existing storage facilities, with 100,000 m3 for RM91 million.
“The acquisition price for JCorp’s storage facilities equates to RM910 per m3, relatively on par with MISC’s Langsat Terminal RM825 per m3 purchase.
“Dialog intends to expand its storage capacity at Tanjung Langsat by 300,000 m3 over time. With that, its overall capacity at Tanjung Langsat will rise from 647,000 m3 to 947,000 m3.
“Notwithstanding Tanjung Langsat, we understand that Dialog has plans to expand its tank storage operations at Pengerang too, commencing its next expansion phase soon,” it said.
Maybank IB said Dialog’s Pengerang operations have the capacity to add another five million m3 storage facilities.
Maybank IB has upgraded Dialog “buy” from “hold”, previously and raised its target price by 13 per cent to RM2.63.