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Research by Maybank
Sell – TP RM4.18

“2Q24: Shortfall; Pengerang COD a key de-rating catalyst"

PCHEM’s 2Q24 earnings was within our expectation but below consensus. With that, we make no change to our FY24-26E earnings. However, we reduce our TP to MYR4.18 (-87 sen) based on a lower target PER of 15x, at -0.5SD to its 7-year mean (previously MYR5.05 on 18.1x) with the de-rating to reflect the gloomy outlook for polymer prices for the foreseeable future. Due to a still challenging operating environment, we advise investors to avoid the petrochemical sector for the time being. COD of Pengerang in 2H24 is a key de-rating catalyst, in our view. Maintain SELL.

Analyst:
Jeremie Yap
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$KLSE-PCHEM
Research by Maybank
Sell – TP RM4.18

“2Q24: Shortfall; Pengerang COD a key de-rating catalyst"

PCHEM’s 2Q24 earnings was within our expectation but below consensus. With that, we make no change to our FY24-26E earnings. However, we reduce our TP to MYR4.18 (-87 sen) based on a lower target PER of 15x, at -0.5SD to its 7-year mean (previously MYR5.05 on 18.1x) with the de-rating to reflect the gloomy outlook for polymer prices for the foreseeable future. Due to a still challenging operating environment, we advise investors to avoid the petrochemical sector for the time being. COD of Pengerang in 2H24 is a key de-rating catalyst, in our view. Maintain SELL.

Analyst:
Jeremie Yap
jeremie.yap@maybank-ib.com

$PCHEM / 5183 (PETRONAS CHEMICALS GROUP BERHAD)