Dialogs PDT growth prospects promising - The Edge Financial Daily

Dialogs PDT growth prospects promising
22 Mar, 2017
Source: The Edge Financial Daily


Dialog Group Bhd
(March 21, RM1.71)
Maintain hold with an unchanged target price of RM1.56:
We have recently hosted a site visit for over 20 local investors to the southern part of Johor where we visited Dialog Group Bhd's flagship Pengerang Deepwater Terminal (PDT) project. Our focus was primarily on PDT Phase 1 and 2 as well as Dialog's fabrication facility, with the aim of having clarity on the project's progress and better understanding of the project as a whole

We also caught a glimpse of the progress on Petroliam Nasional Bhd's (Petronas) refinery and petrochemical integrated development (Rapid) project, which is situated beside Dialog's PDT. This visit reaffirmed investors that PDT is shaping up nicely and is on track to support the Rapid project. The successful PDT Phase 1 has been fully operational since 2015 and has since received over 970 vessels. We remain positive about Dialog's long-term PDT growth prospects

PDT Phase 2 comprises tanks for both petroleum and petrochemical products with a total storage capacity of 2.1 million cu m, which is dedicated specially for Petronas. This terminal also has a deepwater jetty facility, which consists of 12 berths with water depths up to 24m that is able to accommodate very large crude carriers.

Dialog is targeting to achieve mechanical completion for its petroleum tanks by end-July 2018. Petrochemical tanks are still at an early stage of work as the group has only acquired the piles and tank plates. The Pengerang liquefied natural gas (LNG) project by Dialog LNG Sdn Bhd and Pengerang LNG (Two) Sdn Bhd, which consists of two units 200,000 cu m LNG storage tanks, is expected to receive its first shipment by end-August 2017, which should result in maiden income stream flowing in.

Dialog's fabrication yard was seen occupied with moulded bullet tanks and large pressure vessels, which are to be progressively delivered to ToyoThai Corp Ltd. This was meant for Rapid project's Steam Cracker Complex. We understand that four more outstanding bullet tanks are to be delivered. — Affin Hwang Capital, March 21

Dialog Group Bhd

FYE DEC 31 (RM MIL) 2015A 2016A 2017E 2018E 2019E
Revenue 2,358.2 2,534.5 2,612.8 2,754.6 2,897.4
Ebitda 400.3 334.2 375.6 402.7 430.1
Pre-tax profit 370.5 368.7 408.7 469.4 491.8
Net profit 275.1 294.9 316.5 364.4 382.1
EPS (sen) 5.5 5.6 6.0 6.9 7.3
PER (x) 30.2 29.8 27.8 24.1 23.0
Core net profit 253.1 261.0 316.5 364.4 382.1
Core EPS (sen) 5.1 5.0 6.0 6.9 7.3
Core EPS growth (%) 19.0 (2.8) 21.3 15.2 4.9
Core PER (x) 32.8 33.7 27.8 24.1 23.0
Net DPS (x) 2.2 2.2 2.4 2.8 2.9
Dividend yield (%) 1.3 1.3 1.4 1.7 1.7
EV/Ebitda(x) 20.3 20.7 17.9 15.8 15.0
Affin/Consensus(x)     1.0 1.0 1.0

Sources: Company, Affin Hwang estimates