(DLG MK/HOLD/RM2.22/Target: RM2.35)

Dialog offers long-term upside on the back of the new Pengerang Phase 2 earnings contribution by 4QFY18, and potential Phase 3/other capacity expansions by another 5- 10m cbm. However, we see near-term risks in JV (Phase 1) income from a high base, as regional spot storage rates have normalised from peak levels of S$6-9/cbm to S$4-5/cbm. We retain our forecasts at this juncture, but factor in downside risk in JV income. Downgrade to HOLD, and revise target price down to RM2.35. Entry price: RM2.15.

Source: UOB Kay Hian Research - 10 Nov 2017