Saham: KLSE-PCHEM - PT. Petronas Chemicals Group Berhad

Titan Trading Notes For Monday [24/2/2025]:

KLCI had a decent rebound back towards the 1591 points region with an overall mixed market sentiment as we still had almost 450 counters closing red for the day. Daily trading volume dipped slightly below the 3 billion mark, whish isn't a good sign.

Main stocks that showed strong buying momentum would be the likes of MYEG, PCHEM, UEMS, GAMUDA, SUNLOGY, IJM, AIMFLEX, DIALOG, MRDIY, TANCO, MNHLDG, and CBHB. All of which were able to sustain their rallies throughout the day on the top volumes list despite the mixed market sentiment.

$UEMS / 5148 (UEM SUNRISE BERHAD) since retracing all the way back towards its RM 0.885+ main support levels from last Thursday, was able to emerge as one of the star performers on Friday, breaking out all the way towards the RM 0.98+ regions with huge volume and buying momentum here.

So far looking not too bad here and if able to breakout from its RM 1+ major resistance levels on the daily chart, could trend back up towards its RM 1.10+ main downtrend resistance levels soon in the coming weeks.

Will be monitoring UEMS closely.

$PCHEM / 5183 (PETRONAS CHEMICALS GROUP BERHAD) on the other hand since announcing solid earnings of almost RM 520 million in PAT in its latest QR, was able to rebound strong from its RM 3.65+ support levels all the way back towards the RM 4.10+ regions with huge volume.

For those that have not noticed, PCHEM has actually been dropping over the past year here since its RM 7 regions, heading all the way back towards the RM 3.64 regions on Thursday. Definitely still on a downtrend here but if able to sustain this rebound, could rebound further back towards the RM 4.50+ regions soon.

Will be monitoring PCHEM closely.

$CBHB / 0339 (CBH ENGINEERING HOLDING BERHAD) since announcing solid earnings of slightly over RM 10 million in PAT, was able to sustain its buying momentum and closed back green around the RM 0.335 regions on Friday despite the mixed market sentiment.

For now, it's looking quite strong here and as long as able to sustain above its RM 0.325+ immediate support, could trend back up towards its RM 0.35 - RM 0.36 major resistance levels in the coming weeks here.

Will be monitoring CBHB closely.

$PCHEM / 5183 (PETRONAS CHEMICALS GROUP BERHAD)
I'd take a wait & hold stance. Good company, but challenging times. Probably enter below RM4.

$PCHEM / 5183 (PETRONAS CHEMICALS GROUP BERHAD)
Research Report by CGSI

$PCHEM / 5183 (PETRONAS CHEMICALS GROUP BERHAD)
Research by KENANGA

Titan Trading Notes For Monday [25/11/2024]:

$KLCI had a slight rebound back towards the 1589 points region with an overall mixed market sentiment as we still saw over 550 counters closing red for the day on Friday. Daily trading volume settled around the 2.5 billion mark, which is still quite low.

Main stocks that showed strong buying momentum would be the likes of GTRONIC, 99SMART, PCHEM, YEWLEE, TENAGA, and RL. All of which were able to sustain their rallies throughout the day on the top volumes list despite the mixed market sentiment.

$GTRONIC / 7022 (GLOBETRONICS TECHNOLOGY BERHAD) definitely stood out during last Friday as it was able to breakout all the way towards the RM 0.57 regions with huge volume and buying momentum here despite the mixed market sentiment.

This came after it retraced over the past few months here all the way back towards the RM 0.50+ major support level. For now still facing selling pressure around its RM 0.57 main downtrend resistance level here. If able to breakout from this region, then it could be quite promising for GTRONIC.

Will be monitoring GTRONIC closely here.

$PCHEM / 5183 (PETRONAS CHEMICALS GROUP BERHAD) since retracing all the way back towards its RM 4.50+ major support levels last week, had been able to rebound quite well back towards the RM 4.90+ regions with huge volume and buying momentum.

This came after it reported its first ever loss in the latest QR report. That said, as long as able to hold above its RM 4.80+ immediate support, could continue to rebound back towards the RM 5.10+ regions soon here.

Will be monitoring PCHEM closely.

$PCHEM / 5183 (PETRONAS CHEMICALS GROUP BERHAD) since retracing all the way back towards its RM 4.50+ major support levels last week, had been able to rebound quite well back towards the RM 4.90+ regions with huge volume and buying momentum.

This came after it reported its first ever loss in the latest QR report. That said, as long as able to hold above its RM 4.80+ immediate support, could continue to rebound back towards the RM 5.10+ regions soon here.

Will be monitoring PCHEM closely.

$SENDAI / 5205 (EVERSENDAI CORPORATION BERHAD) since breaking out towards the RM 0.78+ regions, had actually been retracing-consolidating over the past 5-6 months here with RM 0.465+ as the major support level.

Recently, it seems to have broken out from its RM 0.55+ main downtrend resistance with good volume and buying momentum here. So far still able to hold quite well and as long as able to sustain above its RM 0.55 support, could continue to trend up towards the RM 0.64 - RM 0.65+ regions soon for an uptrend continuation pattern.

Will be monitoring SENDAI closely here.

$PCHEM / 5183 (PETRONAS CHEMICALS GROUP BERHAD)
Research by TA

$PCHEM / 5183 (PETRONAS CHEMICALS GROUP BERHAD)
Research by Maybank

$PCHEM / 5183 (PETRONAS CHEMICALS GROUP BERHAD)
Research by KENANGA

$PCHEM / 5183 (PETRONAS CHEMICALS GROUP BERHAD)
Research by HLIB

$PCHEM / 5183 (PETRONAS CHEMICALS GROUP BERHAD)
Research by CGSI

$PCHEM / 5183 (PETRONAS CHEMICALS GROUP BERHAD)
Research by Maybank

$PCHEM / 5183 (PETRONAS CHEMICALS GROUP BERHAD)
Market oversupply. Profits squeezed down. Still a great company.

$PCHEM / 5183 (PETRONAS CHEMICALS GROUP BERHAD) Q2 2024...

$PCHEM / 5183 (PETRONAS CHEMICALS GROUP BERHAD)
Research by TA
Buy – TP RM6.93

“Decline in Share Price Elevates Risk-Reward Potential"

We revised our TP higher to RM6.93/share (previous: RM6.77/share) pegged to 9x CY25 EV/EBITDA as we incorporated a 3% ESG premium in our TP. The recent drop in share price has enhanced the risk-reward profile, leading us to upgrade our recommendation for PCHEM from HOLD to BUY.

Analyst:
Lee Yun Leon
yllee@ta.com.my

$PCHEM / 5183 (PETRONAS CHEMICALS GROUP BERHAD)
Research by MIDF
Buy – TP RM7.54

“Steady Recovery from the Bottom of the Cycle"

• 1HFY24 revenue up +4%yoy, core earnings gained +25%yoy; came in above expectations
• Higher revenue and earnings due to favourable forex, higher sales in Specialties segment
• Headwinds remain in 2HCY24 but supported by elevated Brent, improved global manufacturing activities
• Upgrade to BUY with revised target price of RM7.54

Analyst:
MIDF Research
research@midf.com.my

$PCHEM / 5183 (PETRONAS CHEMICALS GROUP BERHAD)
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)
Research by Kenanga
Market Perform – TP RM5.52

“Not Out of the Woods Yet"

PCHEM’s 1HFY24 results were deemed below expectations as we expect more losses ahead from its Pengerang facility upon full commercial operations. Overall, product spreads have improved in 1HFY24 but we believe further progress will be slow and gradual and have been largely priced in. We cut our FY24-25F net profit forecasts, reduce our TP by 12% to RM5.52 (from RM6.28) which is already at its 5-year historical mean PER based on FY25F numbers, but maintain our MARKET PERFORM call.

Analyst:
Lim Sin Kiat, CFA
limsk@kenanga.com.my

$PCHEM / 5183 (PETRONAS CHEMICALS GROUP BERHAD)
Research by HLIB
Sell – TP M4.70

“Core numbers fall short"

PCHEM recorded 2Q24 core net profit of RM444m, bringing 1H24 core earnings to RM924m (-23%). The results were below ours and consensus expectations. The negative deviation stemmed from higher-than-expected opex from PIC. Core earnings declined 8% QoQ due to lower EBITDA contribution from O&D segment (-17%) owing to higher operational costs being expensed off in PIC from 2Q24 onwards as most plants have done performance test runs (PTR) and are close to achieving COD. We note that LBITDA from PIC in 2Q24 expanded to c.RM100m from c.RM10m in 1Q24. Post-COD in 2H24, PIC will likely record c.RM600m of net losses per annum, assuming it achieves EBITDA breakeven. Cut our FY24f/FY25f/FY26f forecasts by -9%/-7%/-7% and reiterate SELL call with lower TP of RM4.70 based on a PE multiple of 15x on FY25f EPS.

Analyst:
Brian Chin
brianchy@hlib.hongleong.com.my

$PCHEM / 5183 (PETRONAS CHEMICALS GROUP BERHAD)
Research by CGS
Hold – TP RM5.70

“Trough reached but upside catalysts missing"

■ 1H24 core net profit of RM1.1bn undershot at 45% of our previous full-year forecast as PCG began expensing PPCSB fixed opex earlier than expected.
■ Reiterate Hold with lower TP of RM5.70, now on 1.1x CY24F P/BV (from 1.3x), 2 s.d. below mean since 2019 (from 2 s.d. below mean since 2011).
■ We think that the risk to earnings from the start-up of PPCSB operations is already in the share price but upside catalysts are missing.

Analyst:
Raymond YAP, CFA
raymond.yap@cgsi.com

$PCHEM / 5183 (PETRONAS CHEMICALS GROUP BERHAD)
Research by AmInvest
Hold – TP RM5.90

“Light at the end of tunnel for Pengerang plant"

We maintain HOLD on Petronas Chemicals Group (PChem) with a lower fair value (FV) of RM5.90/share (from RM6.22/share), pegged to FY25F EV/EBITDA of 8x - at par to its 5-year average of 8x. Our FV reflects our 4-star ESG rating which accords a 3% premium (Exhibit 11).

Analyst:
Muhammad Nuur Ashman Ab Razak
muhammad-nuur-ashman.a@ambankgroup.com

$PCHEM / 5183 (PETRONAS CHEMICALS GROUP BERHAD)

$KLK / 2445 (KUALA LUMPUR KEPONG BERHAD) $KLSE-SDG $PETDAG / 5681 (PETRONAS DAGANGAN BHD) $PCHEM / 5183 (PETRONAS CHEMICALS GROUP BERHAD)

$PCHEM / 5183 (PETRONAS CHEMICALS GROUP BERHAD)
Research by Kenanga
MARKET PERFORM – TP RM6.28

" Stable Outlook, At Best”

PCHEM guided for stable to slightly weaker outlook for prices of its products due to a soft global economy partially cushioned by supply constraints, which does not differ from our view that the downstream segment of the oil & gas industry is still lacking catalysts. We maintain our forecasts, TP of RM6.28 and MARKET PERFORM call.

Analyst:
Lim Sin Kiat, CFA
limsk@kenanga.com.my

OIL & GAS
$MISC / 3816 (MISC BERHAD) $PCHEM / 5183 (PETRONAS CHEMICALS GROUP BERHAD) $YINSON / 7293 (YINSON HOLDINGS BERHAD)
Research by CGS
Overweight

“GloBE impact on PCG, MISC and Yinson”

The Global Anti-Base Erosion (GloBE) rules is an initiative of the OECD and G20, whose purpose is to impose a Global Minimum Tax (GMT) of 15% or more on the profits of Multinational Enterprises (MNE) to prevent them from shifting profits to low tax jurisdictions and deprive countries of their rightful tax revenues. This note explores the impact of GloBE on companies like MISC and Yinson that currently enjoy tax exemption on their shipping and FPSO operations in Malaysia and Singapore. Petronas Chemicals Group (PCG), meanwhile, is enjoying just 3% tax on the profits of its Labuan sales entity, which has depressed its effective tax rate (ETR) to below the GMT of 15% for most years. With Malaysia and Singapore embracing the GloBE rules and committed to collecting GMT of 15% from 1 Jan 2025F, this report assesses how they affect PCG, MISC, and Yinson.

Analyst(s):
Raymond YAP, CFA
raymond.yap@cgsi.com