Samchem Holdings Berhad

SAMCHEM - Notice of Book Closure

First Interim Dividend

General Meetings: Outcome of Meeting

$SAMCHEM / 5147 (SAMCHEM HOLDINGS BERHAD) ‘s FY2023 Annual Report brief summary:

# Financials:

- Rev decreased by 12% to RM 1.16 bil despite logging higher vol of chemicals sold.
- PBT dropped by 21% to RM 48.03 mil due to the downward trend of chemical prices from 2HFY2022, which continued throughout FY2023 in part due to weaker than expected demand from the reopening of China, as well as the slowdown in Europe.
- Geographical segment rev: Malaysia (48%), Vietnam (42%), Indonesia (7%) and Singapore (3%).
- Geographical segment PBT: Malaysia (61%), Vietnam (34%), Indonesia (1%) and Singapore (5%).
- Gearing ratio of 0.26.
- Dividend payout ratio of 42% was declared for FY2023.
- 1HFY2023 war particularly challenging due to extraordinary events occurring arbitrarily around the globe. For example, the war in the Middle East, weakening of MYR against USD, growing geo-political tensions in the South China Sea, the ongoing Russian-Ukraine war and China’s recovery was slower than anticipated.

# Updates:

- The newest plant in Pulau Indah Industrial Park, Port Klang was completed and commissioned in June 2023. Besides storage of drums, the new plant feature tanks for storage of bulk chemicals for distribution, with blending facilities of solvents to produce customized products for specific applications. The new plant will focus on chemical distribution and warehousing in the Central region, bulk-breaking with a QC lab to provide value-added services.
- The Group also acquired CKJ Logistics SB (completed by Q1 FY2024) via SC Udes SB. This move is to expand and strengthen their logistics infra.
- A 7-acre warehouse in Long An province, Vietnam has recently commenced operations. This warehouse is completed with storage tanks, bulk-breaking facilities and weighbridge to cater to the increasingly demanding market.

# Prospects:

- Despite all the uncertainties happening around the globe, the Group sees ample opportunities abound for them to solidify its position in the challenging and volatile market.
- Domestically, the implementation of 6% SST in the logistics sector as well as the expected reduction/removal of fuel subsidies will probably impact the domestic demand.

$SAMCHEM / 5147 (SAMCHEM HOLDINGS BERHAD) ‘s Q1FY2024 Quarterly Report summary:

# Comparing current quarter (Q1FY2024) with preceding year corresponding quarter (Q1FY2023):
- Rev improved by 17% to RM 298.24 mil due to increase in sales vol.
- Gross profit increased by 32% to RM 33.85 mil.
- Administrative expenses increased by 27% to RM 17.87 mil even tho rev only improved by 17%.
- PBT rose by 7% to RM 9.13 mil due to higher sales vol and gross margins.
- PAT also rose by 8% to RM 7.06 mil
- Net profit margin deteriorated from 2.6% to 2%.
- EPS dropped from 1.20 sen to 1.12 sen.
- NOCF improved quite significantly to RM 13.07 mil from RM 2.55 mil.
- Geographical segment rev: Malaysia (52%), Vietnam (41%), Indonesia (5%), and Singapore (2%). All markets recorded better results except for the Indonesian market which saw a 30% drop in rev. The Indonesian market’s loss was widened by 275% to – RM 663 mil while the Vietnam market turned very profitable.

# Comparing current quarter (Q1FY2024) with immediate preceding quarter (Q3FY2023):

- Rev dropped by 3% to RM 298.24 mil.
- Gross profit declined by 14% to RM 33.85 mil
- Total expenses increased by 3% even tho rev is declining.
- PBT fell by 52% to RM 9.13 mil due to lower sales vol and gross profit margins.
- PAT also fell by 46% to RM 7.06 mil.
- Net profit margin declined from 3.4% to a mere 2%.

# Prospects:

- Over the past year, they have expanded their warehousing cap in both Malaysia and Vietnam, a strategic initiative poised to unlock new opportunities for growth.
- This expansion is pivotal to facilitate their penetration into new client’s segment and to broaden their product offering.
- In addition, they also aim to capitalize on the potential opportunities arising from both the shifting trends of Chinese manufacturer’s supply chain, as well as the relocation of global chemical plants to this region.
- The Board remains cautiously optimistic on a more favorable overall operating environment, particularly in the 2HFY2024.
- This outlook is bolstered by anticipated improvements in the economic landscape and heightened demand driven by increased construction and infra activities within their key markets.

OTHERSMEDIA RELEASE-SAMCHEM HOLDINGS BERHAD'S ("SAMCHEM") REPORTS NET PROFIT OF RM7.1 MILLION IN 1Q2024

Quarterly rpt on consolidated results for the financial period ended 31/03/2024

Annual Report & CG Report - 2023

CIRCULAR TO SHAREHOLDERS IN RELATION TO : (A) PROPOSED RENEWAL OF SHAREHOLDERS' MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE; AND (B) PROPOSED RENEWAL OF SHARE BUY-BACK AUTHORITY

General Meetings: Notice of Meeting

OTHERSSAMCHEM HOLDINGS BERHAD ("SAMCHEM"OR "COMPANY")

(1) PROPOSED RENEWAL OF SHAREHOLDERS' MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE; AND

(2) PROPOSED RENEWAL OF SHARE BUY-BACK AUTHORITY

SAMCHEM - Notice of Book Closure

Fourth Interim Dividend

$SAMCHEM / 5147 (SAMCHEM HOLDINGS BERHAD) ‘s QR for Q4FY2023 is out and that sums out their FY2023 with another year of profitability despite unfavorable biz environment.

Samchem’s results are improving QoQ since Q4FY2022 but their rev and profits are trending down from FY2020 till FY2023. Moreover, their profit for FY2023 is the also lowest since FY2020. So, what’s going on with chemical demand?

Let’s delve into the numbers!

# Comparing current quarter (Q4FY2023) with preceding year corresponding quarter (Q4FY2022):

- Rev is up by 13% to RM 308.31 mil due to increase in sales vol.
- COS/Rev is slightly lower from 91% to 87%.
- Other Income improved significantly from a loss amounting RM 3.4 mil to a gain of RM 5.5 mil.
- Administrative expenses and Selling & Distribution expenses increased by 26% and 165% respectively despite rev only increased by 13%. However, Other operating expenses recorded an inflow of RM 1.12 mil instead of an outflow.
- Total expenses are up 9% to RM 25.50 mil.
- PBT and PAT also gained significantly from loss making to a gain of RM 19.21 mil and RM 13.10 mil respectively due to higher profit margins and higher contributions from other income.
- EPS improved from -0.39 sen to 1.90 sen.
- Net profit margin shot up from -0.8% to 3.4%.
- NOCF deteriorated from a positive of RM 69.7 mil to a negative of RM 10.31 mil.
- Rev segregation by geographic: Malaysia (48%), Indonesia (6%), Vietnam (43%) and Singapore (3%). Vietnam’s rev increased by the most (24%).
- Indonesia and Vietnam’s operation which was loss making previously, also turned profitable.

# Comparing current quarter (Q4FY2023) with immediate preceding quarter (Q3FY2023):

- Rev dropped by 4% to RM 308.31 mil.
- Other income increased by 64% to RM 5.5 mil.
- Total expenses decreased by 1% to RM 25.50 mil.
- PBT improved by 55% to RM 19.12 mil due to better gross profit margins.
- PAT also improved by 35% to RM 13.10 mil.
- Net profit margin rose from 2.6% to 3.4%.

# Comparing FY2023 with FY2022:

- Rev is down by 12% to RM 1.16 bil due to lower ASP.
- Other income gained 98% to RM 16.56 mil.
- Total expenses decreased by 2% to RM 96.25 mil.
- PBT dropped by 21% to RM 47.97 mil due to lower margins.
- PAT also dropped by 22% to RM 35.39 mil.
- Net profit margin declined from 3.2% to 2.6%.
- Net debt of RM 85.35 mil.

# Prospects:

- Chemical demand was subdued earlier in FY2023.
- However, the pick-up in demand and stabilizing prices across key markets in recent months offer optimism for further improvements in the market.
- Over the past year, the management have expanded their warehousing capacity in both Malaysia and Vietnam. This expansion is pivotal to facilitate their penetration into new client’s segment and to broaden their product portfolio offering.
- Furthermore, the management also aims to capitalize on the potential opportunities arising from both the shifting trends of Chinese manufacturer’s supply chain, as well asn the relocation of global chemical plants to this region.
- The management remains cautiously optimistic on a more favorable overall operating environment, particularly in 2H2024.
- This outlook is bolstered by anticipated improvements in the economic landscape and heightened demand driven by increased construction and infer activities within their key markets.

Quarterly rpt on consolidated results for the financial period ended 31/12/2023

OTHERSMEDIA RELEASE-SAMCHEM HOLDINGS BERHAD'S ("SAMCHEM") NET PROFIT INCREASED 4-FOLD TO RM13 MILLION IN 4Q2023

Stocks Watchlist

Stocks with strong business model and market leader in the sectors they operate and also having good profit consistently over the years building up strong balance sheet and positive operating cash flow which I am monitoring closely for entry at the right price:

PIE @RM3.33 – probably trading at forward PE 15 or lower after coming Q4 announcement by end Feb 2024.

Potential to develop further into an EMS player with its expansion plan and being a subsidiary of “Honghai/Foxcon Group” will certainly open up more business opportunities. From Q3 announcement in Nov 2023, the Company stated that in order to accommodate new business opportunities, plant 5 and plant 6 are under major renovation and expansion. Plant 5 has just completed the necessary renovation and plant 6 is expected to be ready in Q3 2024. Both expanded facilities will be able to support PIE's next 5 years' growth.

Samchem @66 Sen
The largest chemical trading and distributions in Malaysia and a cross ASEAN is probably on road to recovery given its share price trending higher and higher.

Dufu @ RM1.74 –
Waiting for a lower price for entry. Company is having about 40% share of Global HDD spacer ring market and would be on road to recovery for better profit given both Seagate and Western Digital are fairly positive of market recovery with their recent Dec Qtr announcement.

RGB @ 31 Sen
A defensive stock to buy and hold for dividend and offer opportunity for growth with the regularization of the gaming industry in Philippines and the booming tourism industry in Asia. Co is trading at an attractive PE 6.2 as we are estimating Company to close FY 2023 with EPS of about 5 Sen or more. Company has a net cash of RM177 mil (11.47 Sen per share) as at 30 Sept 2023 and for the 9 mths ended 30 Sept 2023 the operating cash flow generated was RM126 mil (FY 2022 RM120 mil). You cannot be wrong with this solid cash generating Co where its customers paid deposits for orders made.

Ulicorp @RM1.49
Company paying qtrly dividend and amount paid for FY 2023 is 8 Sen (FY 2022 6 Sen) giving a dividend yield of 5.37%. At RM1.49, it is trading at PE7.74 using 4 rolling qtrs. EPS of 19.24Sen. Company has a net cash balance of RM99.2 million (at 31 Dec 2022 RM72.5 million) or cash per share of 45.5 Sen and net asset of Company at 30 Sept 2023 was RM1.70.


SKB @61.5 S3en
At 61.5 Sen, it is currently trading at PE 5.41 based on FY 2023 EPS of 11.36. It is currently trading a PE5.39 based on 4 rolling qtrs. EPS of 11.42 Sen.
A GEM WITH HUGE POTENTIAL FOR UPSIDE WITH ITS PROPOSED NEW 9.8 ACRES NEW FACTORY IN SETIA ALAM ECO BUSINESS PARK TO BE READY IN 2025 FOR ITS EXPANSION PLAN FOR NEW PRODUCTS. CURRENT PLANT CAPACITY IS FULL.
ITS NEW INNOVATIVE ANTI FLOOD SHUTTERS IS TAKING OFFVERY WELL. From our market sources we heard IOI Mall is installing the anti flood shutter and a MNC in Penang is also installing it and orders coming from other Companies in Penang. This higher profit margin shutters will be driving the profit in FY 2024 and going forward.

The Co in our opinion is so much undervalued given its business potential and asset undervaluation.
The book value of the 12 acres (522,720 sq ft) factory land in Kota Damansara is RM58,300,013 equivalent to RM111.53 per sq ft. The market value from my research is RM300 to RM350 PSF. At RM300 PSF, there could be a revaluation surplus of RM98.517 mil or about 75 Sen per share which is more than its current market capitalization.

A PE of 7 will support a valuation of 79.5 Sen based on FY 2023 EPS of 11.36 Sen. Hold this stock for a longer-term view and not for trading.

Coastal @ 1.73
Hold and it should be doing well going forward and its balance sheet would be strengthen once its JVC Co obtain term loan financing (supported by its continuous stream of gas processing income generated to support loan repayment ) and repay advances of RM700 mil loan by Coastal to the JVC Co.



$PIE / 7095 (P.I.E. INDUSTRIAL BERHAD) $SAMCHEM / 5147 (SAMCHEM HOLDINGS BERHAD) $DUFU / 7233 (DUFU TECHNOLOGY CORP. BERHAD) $RGB / 0037 (RGB INTERNATIONAL BHD) $ULICORP / 7133 (UNITED U-LI CORPORATION BERHAD)

@portoftheyear

YINSON 20%
PARKSON 15%
MYNEWS 15%
GENETEC 10%
AEMULUS 10%
TECHBND 5%
$SAMCHEM / 5147 (SAMCHEM HOLDINGS BERHAD) 10%
$KPPROP / 7077 (KERJAYA PROSPEK PROPERTY BERHAD) 10%
$MFCB / 3069 (MEGA FIRST CORPORATION BERHAD) 5%

My portfolio allocation for @portoftheyear 2024

$UNISEM / 5005 (UNISEM (M) BERHAD) 30%
$SCGBHD / 0225 (SOUTHERN CABLE GROUP BERHAD) 20%
$SAMCHEM / 5147 (SAMCHEM HOLDINGS BERHAD) 20%
$PENERGY / 5133 (PETRA ENERGY BERHAD) 20%
$TOMEI / 7230 (TOMEI CONSOLIDATED BERHAD) 10%

Distribution rationale takes multiple aspects into consideration, of technical chart, fundamental and thematic plays.

#TECH
Goes without saying, multiple analyses have shown 2024 to be bullish for semiconductor as inventory depleted

#PETROCHEM
SAMCHEM & PENERGY as commodity may continue to stay relevant into the year of 2024 plus the expected expanded CAPEX from Petronas, as well as industrial chemicals as NETR emphasized on the Pengerang Integrated Petroleum Complex

#INFRA
Selecting SCGBHD for 2024 domestic infrastructure development beneficiary. Wanted to include TRC too but chose the former due to renewable energy theme and technical chart

#HEDGE
Tomei for gold theme to hedge some of the inflation risk in case interest rate expectations go south

Rather conservative lineup but let’s see if it works

SAMCHEM - Notice of Book Closure

Third Interim Dividend

$SAMCHEM / 5147 (SAMCHEM HOLDINGS BERHAD) ‘s Q3FY2023’s QR is out! Results are improving!

Petrochemical’s demand is back?

Apologies for the late post, as I was away for the last few days. But great movement for Samchem!
@LittleShare @boncos

# Comparing current quarter (Q3FY2023) with preceding year corresponding quarter (Q3FY2022):

- Rev increased by 2% to RM 322.53 mil due to increase in sales vol. Also 3rd consecutive quarter of rev and vol growth for the Group.
- COS even went down 2%.
- Gross profit is up 51% to RM 34.64 mil.
- Admin expenses and selling & distribution expenses were up 36% and 38% respectively even tho rev is only up by 2%.
- PBT surged 71% to RM 12.36 mil due to higher profit margins.
- PAT also surged 75% to RM 9.74 mil.
- Net profit margin improved from 2% to 2.6%.
- EPS grew from 1.19 sen to 1.56 sen.
- NOCF is slightly lower at RM 7.52 mil.
- Generated FCF.
- Geographical segment rev: MY (45%), Indo (7%), Viet (45%) and Singapore (3%)
- Rev is MY and Indo decreased by 11% and 8% respectively, but rev in Viet and Singapore both increased by 19% respectively.
- Viet turned profitable in the current quarter (was in the red in Q3FY2022).
- Declared a 3rd interim dividend of 0.6 sen per ordinary share.

# Comparing current quarter (Q3FY2023) with immediate preceding quarter (Q2FY2023):

- Rev is up by 17% to RM 322.53 mil due to improvements in both sales vol and margins.
- COS also increased by 16%.
- Gross profit rose by 23% to RM 34.64 mil.
- Admin expenses and selling & distribution expenses’s increase is in line with the increase in rev.
- PBT soared by 57% to RM 12.36 mil.
- PAT surged by 62% to RM 9.4 mil.
- Net profit margin improved from 2% to 2.6%.

# Executive Chairman’s comment:

- Samchem achieved satisfactory results, marked by increased sales vol across all key geographies despite prevailing subdues biz sentiments.
- Witnessed improving economic landscape and stabilizing biz environment in recent months.
- This shift also provided some respite, with market inventory levels normalizing, subsequently easing price competition.
- Looking ahead, hopeful for further improvements in the coming quarters, bolstered by construction and infra projects, in addition to higher activities across sectors as reflected by rising sales vol.
- The newly commissioned facility at Pulau Indah Industrial Park is currently operating at its optimum capacity.
- New facilities are also being launched in Viet.

Samchem Holdings Bhd is anticipating further improvements to its earnings on the back of its construction and infrastructure projects as well as higher activities across sectors.

Quarterly rpt on consolidated results for the financial period ended 30/09/2023

KUALA LUMPUR: Buoyed by encouraging third-quarter results, Samchem Holdings Bhd is anticipating further improvements to its earnings on the back of its construction and infrastructure projects, as well as higher activities across sectors.

@boncos the BDI has rocketed to the highest level in 2023 so far. Typically BDI is a precursor to economic activity (as people always say, logistics is lifeblood of the economy).

I haven't looked into it in detail, but the trade and manufacturing numbers are showing a rebound at least-- and this is also supported by the rising BDI as per Wckyoff's theory.

With many stocks (in Malaysia) still in "discount" compared to historical valuation, perhaps this could be a good opportunity. Many businessmen in Malaysia are "takut mati" kind of mentality, so a lot of companies are actually very high net cash position (or mostly in low debt position). example: $HARBOUR / 2062 (HARBOUR-LINK GROUP BERHAD) $ASTINO / 7162 (ASTINO BERHAD) $SAMCHEM / 5147 (SAMCHEM HOLDINGS BERHAD) $PCHEM / 5183 (PETRONAS CHEMICALS GROUP BERHAD) and so on. These are some companies who benefit from increased economic activity (and vice versa).

See attached excerpt and find the beneficial sectors (from https://cutt.ly/uwbZhlKx )

tagging @BrianTeng @zhiyang007 @LittleShare who might be interested in these data.

SAMCHEM - Notice of Book Closure

Second Interim Dividend

Notes from $SAMCHEM / 5147 (SAMCHEM HOLDINGS BERHAD) 's quarterly briefing:

1. They are involved in basically all sectors and industries. Largest sectors are mainly
-Foams
-Paint and Coating
-Printing/Ink
-Adhesives

2. Warehouses are the Major cities of Malaysia, Indonesia, and Vietnam.

3. They have their own fleet of logistics for normal cargo and bulk cargo.

4. Demand remains subdued due to slow factory activities. Exports to eurozone, US, China have been contracting. However, VN and SG subsidiary shown volume growth.

5. New warehouses in MY and VN to cater for next uptake. Pulau Indah warehouse officiated last month is already at near full capacity.

6. China chemicals ASP seen rebounding, thus reducing spread between China and global chemicals.

7. Some chemical makers are cutting production due to poor ASP-- thus tightening supply. Nevertheless, customers will probably still remain prudent in inventory management.

Financial reslts

8. Lower revenue due to lower realized ASP. However, QoQ, sales volume increased 7%. QoQ PBT, excluding one off gain last Q, actually increased around 25%.

9. PBT margin lower than usual due to Buying 15 new trucks for bulk and cargo trucks.

10. More principals are relocating production into SEA and APAC region which will benefit them.

11. The principals continue to prefer to outsource distribution to simplify their process.

12. New term: ALT-ASIA = Alternative Asian supply chain to China. Malaysia, Indonesia, Vietnam, Singapore are part of this. China labour costs are no longer cheap, and more expensive than some SEA countries.

13. China specifically has issued new environmental regulations that has stricter scrutiny. Some smaller players in China may not comply, and this could force them to shut down which would reduce supply too.

Q&A

14. Which will rebound better, MY or VN?
-We will be very cautious in VN due to their proximity to China-- thus very tight competition
-In Malaysia, we are seeing lots of FDI flowing in. Big demand from construction as FDI are building new plants.

15. PIIP is a consolidation of rented warehouses. Increase volume by around 40%.

16. Aggressively expanding logistics business. Currently around 50 trucks, and plan to expand to 100 trucks. How many are used in house vs external?
For cargo logistics, mostly internal consumption. About 25-30% used for 3rd parties-- could be other customers or to principals.
For bulk cargo, about 70% for external business, and around 30% for internal use.

17. Samchem's 5 year avg dividend payout is around 37% and they intend to keep it around there. The goal is to improve dividend by improving group earnings.

$SAMCHEM / 5147 (SAMCHEM HOLDINGS BERHAD) ‘s latest QR for Q2FY023 is out.

Samchem continues to remain profitable albeit lower revenue and net profit QoQ and YoY.

# Comparing current quarter Q2FY2023 with preceding year corresponding quarter Q2FY2022:

- Rev dropped 25% to RM 276.23 mil due to drop in ASP and sale vol.
- Cost of Sales/Rev also inched up a bit from 87% to 89%.
- Selling & Distribution expenses increased by 14% despite dropping rev.
- Other operating expenses did reduce by 96% to RM 69 mil.
- PBT decreased by 70% to RM 7.89 mil due to lower sales vol and margin compression.
- PAT dived 72% to RM 6 mil.
- Net profit margin contracted from 5% to 2%.
- EPS decreased from 3.35 sen to 0.99 sen.
- OCF turned positive to RM 8.4 mil from previously negative RM 11.64 mil.
- Geographical revenue segment: Malaysia (47%), Vietnam (45%), Indonesia (6%), Singapore (2%). The drop in revenue yoy in terms of percentage wise, Indonesia leads the pack (- 33%), followed by Malaysia (-27%), Vietnam (-21%) and Singapore (-24%).
- Geographical PBT segment: Malaysia (67%), Vietnam (25%), Indonesia (3%), Singapore (5%). The drop in PBT yoy in terms of percentage wise, Indonesia again leads the pack (-80%), followed by Vietnam (-76%), Malaysia (-68%) and Singapore (-22%).
- A second interim dividend of 0.5 sen per ordinary share was declared.

# Comparing current quarter Q2FY2023 with immediate preceding quarter Q1FY2023:

- Rev increased by 8% to RM 276.23 mil due to vol growth and higher ASP.
- Cost of Sales/Rev remained steady at around 89%.
- Total expenses remained relatively the same with only a 2% drop.
- PBT decreased by 7% to RM 7.89 mil due to a one off disposal gain of a factory of RM 2.1 mil in the preceding quarter.
- PAT also decreased by 815 to RM 6 mil.
- Net Profit Margin dwindled to 2% from 2.6% previously.
- Malaysia remained the largest rev contributor, followed by Viet, Indo and Singapore.

# Prospects:

- Mr. Ng Thin Poh (Executive Chairman) stated that the chemicals industry continued to operate in a challenging landscape due to subdued global biz sentiments.
- This led to softened overall demand, a situation exacerbated by the substantial inventory imbalance in the market.
- Mr. Ng also added that the Group drew encouragement from the stabilization of ASP and improved biz conditions in Vietnam and they are hopeful that Malaysia will take on the same trend in 2H2023.
- The recently commissioned warehouse in Pulau Indah is currently operating at near full capacity.
- Lastly, the Groups are well-positioned with a strong foothold to harness growth catalyst stemming from manufacturing relocation initiatives in the region given the success and imminent commissioning of their new facilities in Vietnam.