Dialog announced that its wholly-owned subsidiary, Dialog Malic Acid SB will build, own and operate a specialty chemical plant producing malic acid in Gebeng, Kuantan. The plant will be located within the integrated chemical site operated by BASF PETRONAS Chemicals SB. The investment value is about USD80m (or RM374.6m) with its production capacity approximately 12,000 metric tonnes per annum. The Group is expected to undertake the engineering, procurement, construction and commissioning (EPCC) works internally and expected to be completed in 2Q 2026. We are mildly positive on this development given that it will provide diversification and stable recurring income to its downstream segment in the longer term. Earnings from the malic acid plant could fluctuate however, similar to other petrochemical commodities. We make no changes with our numbers for now as this is still at preliminary stages. We maintain our Neutral call and TP of RM2.40.
Source: PublicInvest Research - 26 Sept 2023
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