Highlights
KLSE: PCHEM (5183)       PETRONAS CHEMICALS GROUP BHD MAIN : Industrial Products
Last Price Today's Change   Day's Range   Trading Volume
7.16   -0.05 (0.69%)  7.13 - 7.20  2,496,300
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Overview

Market Cap: 57,280 Million
NOSH: 8,000 Million
Avg Volume (4 weeks):4,971,831
4 Weeks Range:7.13 - 7.80
4 Weeks Price Volatility (%):
4.48%
52 Weeks Range:6.75 - 9.49
52 Weeks Price Volatility (%):
14.96%
Average Price Target: 8.34
Price Target Upside/Downside: +1.18

Financial Highlight

Latest Quarter | Ann. Date 30-Sep-2019 [#3]  |  13-Nov-2019
Next QR | Est. Ann. Date: 31-Dec-2019  |  25-Feb-2020
T4Q P/E | EY: 15.23  |  6.56%
T4Q DY | Payout %: 4.05%  |  61.70%
T4Q NAPS | P/NAPS: 3.73  |  1.92
T4Q NP Margin | ROE: 21.99%  |  12.60%

Headlines

Date Subject
20-Nov-2019 Petronas Chemical Group - Oh My Chemicals
18-Nov-2019 Stocks on Radar - Petronas Chemicals Group (5183)
15-Nov-2019 PCHEM: Outperform Maintained Despite a Disappointing Result
15-Nov-2019 Petronas Chemicals Group - Soft Outlook Underpinned by Trade War
15-Nov-2019 Petronas Chemicals Group - Expect near full plant utilisation in 4QFY19
15-Nov-2019 Petronas Chemicals Group Berhad - RAPID-ly Rolling On
14-Nov-2019 Petronas Chemicals Group Bhd - Cracks Starting to Show
14-Nov-2019 Petronas Chemical Group Berhad - Commendable Overall PUR of 81% Despite Heavy TA
14-Nov-2019 Petronas Chemicals Group - Looking Forward To A Better 4QFY19
14-Nov-2019 PublicInvest Research Headlines - 14 Nov 2019
14-Nov-2019 Mplus Market Pulse - 14 Nov 2019
14-Nov-2019 Petronas Chemicals Group - Oh My Chemicals
14-Nov-2019 下跌股:国油石化RM7支撑
14-Nov-2019 Petronas Chemical - Weak ASPs, and Pengerang Loss Not Priced in
13-Nov-2019 Petronas Chemicals Group - Drifting with crude oil prices
08-Nov-2019 Strategy - Positioning for the Year-end Party
21-Oct-2019 PublicInvest Research Headlines - 21 Oct 2019
21-Oct-2019 Mplus Market Pulse - 21 Oct 2019
19-Oct-2019 国油化学边佳兰联营公司·落实6亿美元融资
05-Oct-2019 下跌股:国油石化RM7.15支撑

Business Background

Petronas Chemicals Group Bhd manufactures and sells a variety of petrochemicals. The firm organizes itself into two segments based on product type: Olefins & Derivatives and Fertilizers & Methanol. The Olefins & Derivatives segment, which generates the majority of revenue, sells chemicals used in the production of acrylic acids, antifreeze, printing ink, dyes, gas treating solvents, personal care products, and plastics used in packaging films, wires, cables, and ducting. The Fertilizers & Methanol segment sells chemicals used in gasoline additives, plastic resins, ammonia, and fertilizers. The majority of revenue comes from Malaysia, China, and Indonesia.
Analyze this stock with MQ Trader system

  8 people like this.
 
menteribesarpasola Choivo Cap visit netx (0020) your friend calvin taneng call you.
14/11/2019 9:56 AM
Titan chart showing downtrending sign. Losing momentum. RM 7 is the psychological support price. If break this, then expect to drop further.
14/11/2019 10:17 AM
kingb It's all depends on the big kaki.
14/11/2019 11:29 AM
Icon8888 sarawak sifu brings us to Holland
14/11/2019 11:29 AM
Titan sarawak sifu? who???
14/11/2019 12:16 PM
kingb Big kaki want a boat to Antarctica.
14/11/2019 12:37 PM
Outliar @Titan

Mr Phillip :D
Would love his thoughts on this.
14/11/2019 12:38 PM
Choivo Capital Ello Phillip.
14/11/2019 12:38 PM
Choivo Capital I think his thoughts are quite clear.

The nature of PCHEM is that, like all companies in the natural gas refining industry, its the question is if you're geographically blessed or not.

Natural gas cost to extract, is either insanely expensive, or pretty cheap. You have places like Qatar, where the refinery can make 80% ROE, or typical oil rigs where natural gas is considered waste and burned.

And because of this "Geographically Blessed" factor, supply is always less than demand.

Having said that, there will always be a need for natural gas, and i don't mean in electricity generation (which most people use it for), but for the production of ammonia and thus fertilizer.

Currently, there is no way to produce ammonia other than via natural gas, and the Haber-Bosch process (Which requires Hydrogen, that is obtained via the Methane in Natural Gas). And this has been the case since 1910, and currently, there is no significant breakthrough in finding a replacement process.

Without a cheap and efficient process of creating ammonia ammonia, we would all starve (and we almost did before the Haber-Bosch process was discovered). And Haber-Bosch process is not efficient at all, taking up about 2% of the world energy supply.

PCHEM analysis can be broken down very simply to.

1) Will PCHEM always be geographically blessed, with direct pipelines to Petronas Gas Production? How much gas reserves does Petronas/Malaysia have left?

2) Is there a better and cheaper way of creating ammonia, other than the Haber Bosch Process coming up, that would not require the use of natural gas? This is more minor-ish, as only 10% of Natural gas is used for ammonia production, but i personally think this use of natural gas is far more important.
14/11/2019 12:50 PM
Icon8888 when it is so bloody complicated, it is better to tell yourself "I don't know", rather than assuming you know all

we are dealing with real money here, Mr. Sarawak Sifu
14/11/2019 12:52 PM
stockraider Looking at the performance of Titan, u will see this industry are hit by excess capacity and all the big players are big boys loh...!!
14/11/2019 12:57 PM
Icon8888 Sarawak sifu stocks all go holland

that is why he hiding in Muru Cave now
14/11/2019 12:58 PM
stockraider The guy is sabah sifu lah....!!

He is not allow to reside in sarawak bcos of immigration restriction loh....!!

Posted by Icon8888 > Nov 14, 2019 12:58 PM | Report Abuse

Sarawak sifu stocks all go holland

that is why he hiding in Muru Cave now
14/11/2019 1:02 PM
Choivo Capital I noticed Phillip sounds very humble these days.
14/11/2019 1:21 PM
enigmatic ¯\_(ツ)_/¯ Awaiting Philip's comment on PCHEM now. His analysis is always thorough and interesting.
14/11/2019 1:50 PM
Outliar Did he delete his comments? Who is Choivo replying to?
14/11/2019 2:22 PM
popo92 I am reading transcript for analyst briefing now
14/11/2019 4:08 PM
Philip Greta Funny, such short term thinkers. Has IPIC started operations yet?

For those who are not traders and short term investors, let me clarify what I look at in the earnings report: look to
A11. Significant and subsequent events. We are still waiting on completion of PIC with no news on any delay, cancellation or problems. So my original reasoning in purchasing PIC is still interact, thus: discount day.

Look to B1.

The Group recorded lower plant utilisation at 81% from 100% in the preceding quarter, mainly due to statutory turnaround and higher level of maintenance activities undertaken in the current quarter. Sales volume was lower in line with lower production.
Overall average product prices were slightly higher despite lower crude oil price.
Revenue decreased by RM668 million or 15% at RM3.7 billion largely due to lower sales volume.
EBITDA was lower by RM606 million or 40% at RM915 million mainly due to lower revenue and higher
maintenance costs during turnaround period. Profit after tax decreased by RM554 million or 50% at RM558 million.

If you look carefully, due to the fire at IPIC there was a slew of maintenance and turnaround activities that quarter to make sure that mistakes do not reoccur. It was better to do something to reduce profit and increase safety and long term performance. Obviously with lowered production of 19% we also end up with lower revenue (down 15%) and lower earnings.

BUT IS IT A LONG TERM EVENT OR A SHORT TERM ACTIVITY? You may ask yourself if they do maintenance turnaround every quarter and see if sales figures will recover or not.

For the answer to that, look to

COMMENTARY ON PROSPECTS
The results of the Group’s operations are expected to be primarily influenced by global economic conditions,
foreign exchange rate movements, utilisation rate of our production facilities and petrochemical products prices
which have a high correlation to crude oil price, particularly for the Olefins and Derivatives segment.

The utilisation of our production facilities is dependent on plant maintenance activities and sufficient availability
of feedstock as well as utilities supply. The Group will continue with its operational excellence programme and
supplier relationship management to sustain plant utilisation level at above industry benchmark.
Olefins and Derivatives
The Group anticipates product prices for Olefins and Derivatives segment to stabilise in the coming quarter. This
is in view of supply limitation following planned regional turnarounds.
Fertilisers and Methanol
The Group expects that Fertiliser and Methanol product prices to also stabilise due to limited supply amidst soft
demand from the end products.

Simplified, buying PCHEM for the LONG TERM relies on understanding these factors:

Will
1. Malaysia ringgit drop versus USD ( sad to say, a surety)
2. Pchem complete IPIC ( let's say chances are much higher than jaks completion of power plant)
3. Will production and turnaround activities end and lead to higher profits? ( If you believe this quarter is temporary, then you can rely on the last 10 years earnings for pchem to give you forward)

Now, who is willing to bet with me that next quarter results will be at least a billion in earnings and a big far 15 cents of dividends?
14/11/2019 4:59 PM
Philip Greta Is it above market benchmark? You can compare lctitan results and performance with PCHEM to know who will be around 10 years from now and which is undervalued at these p prices.
14/11/2019 5:19 PM
monetary I like to ask a foolish question. Can u trade olefin? If u trade the commodity u don't have to worry about plant shutdown, forex loss, accident like fire and all sorts of managerial problems. Less variables in the equation.
14/11/2019 5:23 PM
Jing Yong Lim PCHEM稳稳啦!PETRONAS旗下子公司的管理层都是马来社会的精英派领导的。。。不怕!

而且国家基金撑着,怕什么?跌破七块钱敢敢买...慢慢收,不能一次过all in。坦白说上个季度排队还差1SEN就matched到了。。。。这一次烂业绩是给我们机会买入持有。。。。这家公司的现金流现金粗到没朋友了
14/11/2019 6:07 PM
Icon8888 Sabah sifu becomes Holland sifu
14/11/2019 6:10 PM
Icon8888 Everyday talk buffett

But invest like buffalo
14/11/2019 6:10 PM
monetary QoQ bottomline dipped by 58%, mainly due to: (1) product price rout for olefins and methanol led to margin compression, and (2) plunge in sales volumes due to statutory plant turnaround (TA) activities.

JY Lim. 第二点可解决。第一点你有何高见?
14/11/2019 6:20 PM
Outliar Lol Icon really giving it to Phillip here, lost alot of money?
14/11/2019 6:25 PM
monetary I think all petrochemical plants around the world not doing well.
14/11/2019 6:29 PM
Jing Yong Lim 股价跌,买入就是了。。。。高见说不上...

毕竟整个行业表现都如此,需要时间整合...

不可逆势而为
14/11/2019 6:50 PM
Choivo Capital Lol personally these result don't say much for me negatively, i'm still OK with my 2.5%.
14/11/2019 7:22 PM
Sslee Hahahaha,
Pchem is definately not Heng Yuan look alike but sometime you cannot fight the preception or bad publicity and outlook on petrochemical as many people come to mind is plastic bad for enviornment and etc hence still waiting for more discount day to buy.
14/11/2019 8:18 PM
monetary Segmental result for cumulative quarter:
Profit margin for olefin & derivative dropped from 24% (2018) to 15% (2019)
Profit margin for fertilizer dropped from 31% (2018) to 28% (2019)
What makes thing worse is 60% of its revenue is from olefin & derivative.
14/11/2019 8:45 PM
monetary banking on olefin price turnaround. olefin price sluggish for more than a yr.
14/11/2019 8:53 PM
monetary when will aromatic start contributing? perhaps aromatic is more stable in terms of pricing.
14/11/2019 9:07 PM
popo92 I already have much exposure average below 7, so make little sense to average up at this price. I would love to wait for more discount day too... but i doubt those big institutional funds would dispose at even more depress bargain as PIC seems on track to complete any soon by now. They are already heading ahead, especially after they paid PIC a visit..... i would say the excitement experience is certainly different than looking on paper and figures..
14/11/2019 10:19 PM
Philip Greta Why don't you stick to your lctitan buying whole driving with left hand on the wheel?

>>>>>>>>

Icon8888 Sabah sifu becomes Holland sifu
14/11/2019 6:10 PM
15/11/2019 9:48 AM
monetary The major problem faced by Pchem is over dependant on olefin. This segmental margin dropped from 25% to 15% n dragged down the overall profit margin. V soon there will b more product varieties to boost margin. Pls read this article.
https://www.theedgemarkets.com/article/petronas-chemicals-spend-rm43b-capex-pengerang-projects
15/11/2019 10:06 AM
monetary Some one compares Pchem to HY or Petronm. There r 2 major differences.
1. Product variety
Read the provided link.
2. Profit margin
The historical best rolling 4Q net margin for HY was 8.4% & 4.2% for Petronm. Both aren't sustainable. The rolling 4Q net margin for Pchem was consistently 25% until recently dropped to 20% due to over supply of olefin. Even the worst segmental margin (olefin) contributes 15% margin.
PIC, Integrated Aroma Ingredients Complex and the Highly Reactive Polyisobutene (HR-PIB) in Gebeng, Pahang will ensure Pchem profit margin sustainable in the increasingly competitive environment.
Besides, Pchem is cash rich. The above expansions r unlikely to cause significant hike in finance cost.
15/11/2019 10:07 AM
monetary I just buy n forget.
15/11/2019 10:07 AM
Eric Pang 中美贸易谈判或陷僵局·​美股涨跌不一或陷僵局·​美股涨跌不一

(纽约15日讯)美中谈判或陷僵局,英国《金融时报》报道称中美可能难以敲定第一阶段贸易协议,中国正在想方设法延迟休战,降低了在未来几天达成最终协议的机会。纽约股市三大股指14日涨跌不一。
15/11/2019 10:17 AM
Philip Greta Not to forget da Vinci acquisition, which does speciality chemicals for the beauty and skincare market.

If icon8888 thinks pchem is bad, then sell.

But if he can wait for a power plant to complete, why not wait for a chemical plant the size of 4 twin towers in steel? And enjoy 29 cents dividend since this year to buy more at discount prices?
15/11/2019 10:17 AM
pamaladu https://www.brb-international.com/uploads/pages/brb-corporate-presentation-2018.pdf

Da Vinci will contribute roughly 3% to PCHEM revenue (based on Da Vinci's revenue of Eur135mil in 2016)
15/11/2019 11:13 AM
pamaladu projected growth of Da Vinci is around 10% to 15%
15/11/2019 11:33 AM
monetary is the 7.41 que genuine?
15/11/2019 12:03 PM
20/11/2019 6:56 PM
Aristocats HLB Tp very stupid.
20/11/2019 7:01 PM
Chokhmah this counter used to support KLCI one, does not know EPF still wants to use it to support or not
20/11/2019 9:48 PM
monetary just hold. add if u have $. show time next yr.
21/11/2019 9:55 AM
t_nike2002 Good time to collect... while dividend yield >4%
21/11/2019 11:03 AM
Titan wondering will it drop back to below 7.....it drop to 6.50, then it will be a great christmas present.......hehe....
21/11/2019 11:35 AM
Aristocats Omg,
No luck here.
I m going to Holland.
How come a national asset oso become shits???
21/11/2019 12:25 PM
Eric Pang I think the net profit of this counter decrease almost 50% that cause disposing of this shares
21/11/2019 2:24 PM


 

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