Ex-one-off (MYR78m inventory write down to NRV), 4Q23 core net profit was MYR161m (-61% QoQ, -81% YoY). FY23 core earnings of MYR1,774m (-69% YoY) was only 86%/82% of ours/consensus estimates.
Key variance against our forecast was due to: i) unexpected shutdown at PC Aromatics and slowdown at PC Olefins due to steam interruption issues, resulting in lower production & sales volume in 4Q23; and ii) crimping of EBITDA and PAT margins due to operating leverage (lower sales volumes), coupled with higher maintenance costs throughout the quarter. A 2nd interim 5sen DPS brings FY23 DPS to 13sen (62% DPR), well within our forecast.
PetChem declared a dividend of five sen per share amounting to RM400 million payable on March 26.
Total dividends for FY2023 came in at 41 sen per share, totalling RM1 billion.
Thank you PCHEM
Meow
27/02/2024 9:53 AM
SsleeWill Pchem break below 6 or 5? Need few more quarters of bad result.
PCHEMâs 4Q23 results missed expectations. We cut our FY24-25E EPS by - 33%/-37% to account for:
i) lower EBITDA margins for its O&D segment; ii) post results house-keeping; and iii) incorporating Pengerang ops beginning 2H24. With that, our TP is lowered to MYR5.05 (from MYR5.75) after rolling forward valuation to FY25E (from FY24E) based on 18.1x PER (previously 16x), its updated 5Y mean. Maintain SELL.
Source : Maybank
27/02/2024 10:16 AM
kvlam1010Mabel, would you please give me the linked of Maybank's TP. of PCHEM ?
27/02/2024 12:29 PM
Mabel#kvlam1010 Mabel, would you please give me the linked of Maybank's TP. of PCHEM ? 27/02/2024 12:29 PM
yielderis this a good time to buy? since China's excess capacity flood the market and forced weak competitors to shut. does Petchem has long term advantage?
07/03/2024 9:28 AM
Mabelyielder is this a good time to buy? since China's excess capacity flood the market and forced weak competitors to shut. does Petchem has long term advantage? 07/03/2024 9:28 AM
Mabel sold all RM 7, RM 7.01 and RM 7.02..
Now waiting to reenter...
PCHEM currently is still bullish..
07/03/2024 10:21 AM
MabelNepo nibble some rm6.7x, great price 05/03/2024 11:44 AM
Well done Nepo...
This is a good price to enter..
07/03/2024 10:21 AM
Mohd ImranRafifilooks like Pchem will b able to break RM7 within this week
MabelHaha Pull back is what Mabel has been waiting for. Today Mabel Re-enter PCHEM at RM 6.76...
Some Nice Uncles and Auntie so nice to sell their PCHEM to Mabel
So apey...
Meow Meow Meow
14/03/2024 12:19 PM
MabelLet see if they still wang to sell to Mabel at RM 6.75 and RM 6.74...
Thank you so much...
Meow
14/03/2024 12:20 PM
bullrun168Wow, oil price was super bull ! Now Brent already at=> $85.42 +1.39 +1.65 %
15/03/2024 7:58 AM
Mohd ImranRafifiNice catch, Mabel. You have made 3% paper gain now đ¤
15/03/2024 4:30 PM
Leesa688Dont understand how PetChem works. Revenue increases but profit margin plunges! I can understand it if revenue plunges and this is from the stable of Petronas well run companies! Now even their dividend plunges! Petronas Gas and Petronas Dagangan have always done well!
15/03/2024 7:43 PM
Mabel#Mohd ImranRafifi Nice catch, Mabel. You have made 3% paper gain now đ¤ 15/03/2024 4:30 PM
Yes Sir!
To Our Success!
Captain Mabel Meow
Friday, March 15th 2024
Brent futures have broken through the $85 per barrel for the first time since November, indicating that the gradually improving sentiment, further buoyed by Ukrainian drone strikes on Russian refineries this week and declining US inventories, is here to stay.
15/03/2024 10:25 PM
MabelPetChem declared a dividend of five sen per share amounting to RM400 million payable on March 26.
Total dividends for FY2023 came in at 41 sen per share, totalling RM1 billion.
Thank you PCHEM
15/03/2024 10:55 PM
MabelLeesa688 Dont understand how PetChem works. Revenue increases but profit margin plunges! I can understand it if revenue plunges and this is from the stable of Petronas well run companies! Now even their dividend plunges! Petronas Gas and Petronas Dagangan have always done well! 15/03/2024 7:43 PM
In the case of Petronas Chemicals Group (PetChem), several reasons have been identified for this financial outcome:
⢠Compressed Margins: Despite higher revenues, PetChemâs earnings before interest, taxes, depreciation, and amortization (EBITDA) were lower mainly due to compressed margins. This could be due to increased competition, higher production costs, or lower selling prices for their products.
⢠Higher Operating Expenses: An increase in operating expenses, such as maintenance and energy & utilities costs, can reduce profit margins even if revenues are up.
⢠Plant Utilization Rate: PetChem reported a lower plant utilization rate due to higher plant statutory turnaround and maintenance activities, which resulted in lower production and sales volumes. This means that even though they may have sold their products at higher prices, they sold less overall, impacting profits.
15/03/2024 10:56 PM
Mabel⢠Foreign Exchange Losses: PetChem experienced higher foreign exchange losses on the revaluation of loans to a joint operation company and of a subsidiary. Currency fluctuations can have a significant impact on the profits of companies that operate internationally.
⢠Acquisition Costs: The acquisition of leading Swedish Chemical Group Perstorp and the associated costs also contributed to the decrease in profits. Acquisitions can lead to short-term financial strain due to the initial costs involved. ⢠https://theedgemalaysia.com/article/petronas-chemicals-subsidiary-buys-swedish-firm-rm7b
⢠Global Economic Conditions: The global economic recovery has been sluggish, which affects demand and prices for chemical products.
⢠Dividends: The decrease in dividends is likely a result of the lower profits. Companies often adjust their dividend payouts based on their profitability to maintain financial stability.
Hence to answer his question, while higher revenues indicate that PetChem was able to generate more sales, various factors like compressed margins, increased operating expenses, lower plant utilization, foreign exchange losses, and acquisition costs have negatively impacted their profit margins and dividends. Itâs a complex interplay of operational performance and market conditions that affect the financial health of a healthy company like PetChem
15/03/2024 10:57 PM
Mohd ImranRafifiYou are so hardworking digging out the old news of Petchem, Mabel đ
20/03/2024 10:47 AM
Leesa688Thanks Mabel for the explanation. Just that PetChem should be able to withstand such pressures as higher operating costs and foreign exchange losses, which are also faced by Petronas Gas or other international companies. Maybe the market does not see that Perstop is a good acquisition.
20/03/2024 7:06 PM
Mohd ImranRafifiPerstop? Is that the company provides waste handling solution?
22/03/2024 10:59 AM
Mabel#Mohd ImranRafifi Perstop? Is that the company provides waste handling solution? 22/03/2024 10:59 AM
No. Perstorp is leading Swedish Chemical Group and a global leader in the specialty chemicals market, known for its innovative approach and sustainable solutions. The company focuses on using small molecular building blocks to create products that enhance everyday life in terms of safety, convenience, and environmental sustainability. Perstorpâs product range serves a variety of industries, including animal nutrition, advanced materials, resins, coatings, and synthetic lubricants.
Recently, Perstorp was acquired by PETRONAS Chemicals Group Berhad (PCG), Malaysiaâs leading integrated chemicals provider. This acquisition is part of PCGâs strategy to expand its presence in the specialty chemicals industry and to grow Perstorpâs value, focusing on sustainability and innovation. The acquisition aims to strengthen Perstorpâs position in the Asia Pacific markets and leverage PCGâs industrial know-how and customer base.
Perstorp is also committed to driving sustainable transformation within the chemical industry. One of their key initiatives is Project Air, which aims to reduce carbon emissions through the production of sustainable methanol. The project has been recognized by the European Union Innovation Fund as one of the large-scale green tech projects to be granted significant funding.
To Our Success!
Meow
25/03/2024 10:30 PM
MabelPerstorp complements PETRONAS Chemicals Group Berhad (PCG)'s future direction and business in several key ways:
Strategic Diversification: The acquisition of Perstorp is a strategic move for PCG to diversify into the specialty chemicals industry, which aligns with its vision of becoming a preferred chemical company providing innovative customer solutions.
Revenue Growth: Perstorp is expected to contribute significantly to PCGâs revenue, with an immediate increase of about 28% based on 2021 results. This supports PCGâs medium-term goal of generating 30% of its revenue from non-traditional businesses by 2030.
Sustainability and Innovation: Perstorpâs focus on sustainable solutions, particularly its Project Air which aims to produce sustainable methanol, strengthens PCGâs decarbonization efforts and commitment to sustainability.
To Our Success!
Meow
25/03/2024 10:41 PM
KingKKKMalaysia's Mega-Cap Showdown: Mega Utilities vs Banks vs Healthcare - Who Wins? YTL, YTLPOWER, IHH, TENAGA, MAYBANK, PBBANK, CIMB, PCHEM
Mohd ImranRafifi@Mabel. I see. I thought it was Perstorp Sdn. Bhd. (https://perstorp.my/) đ
27/03/2024 10:31 AM
NepoThanks @ Mabel for the info look like Pchem future is promising, bought some this morning@ RM 6.80
27/03/2024 1:53 PM
TanleechooHow is china petrol chemical industry? Is Petronas competitive in future.?
27/03/2024 2:36 PM
SsleePetrochemical industries in Europe is facing challenge of lifetime due to escalation cost in EU and cheaper China Petrochemical coming into market.
Pchem is only profitable due to Petronas support of cheaper NG cost.
27/03/2024 2:45 PM
TanleechooThis means like glove industry/ car Industry⌠any thing China touch .it Will be hyper competitive!?
MabelHaha today Mabel collect more at RM 6.71 and RM 6.70..
Hopefully can make some Duit Raya..
29/03/2024 5:44 PM
Mohd ImranRafifiMalaysian is ridiculous...now they are boikot their own products ...
02/04/2024 11:29 AM
SsleePetrochemicals had historically been an exception to Beijingâs general push to be self-sufficient in basic materials, but the new plants being built by Rongsheng, Hengli and even offshore players such as BASF SE are changing that picture. As a result, traditional trade deficits in most downstream oil derivatives are turning into substantial surpluses:
A crucial question for the direction of the global climate is how the rest of the world now responds. Executives running petrochemical facilities outside China are facing glutted markets erasing their profit margins. The EU in November imposed anti-dumping duties on Chinese products made from PET, the type of plastic derived from polyethylene thatâs widely used in bottles.
In Europe, competition from the influx of low-cost Chinese products in recent months has been an issue for chemicals producers on a par with the disappearance of cheap Russian gas as feedstock. âWe see imports from China coming in, in an order of magnitude like never before," BASF chairman Martin BrudermĂźller told an investor call last month.
Right now, plants outside China are still holding on and pumping out products at a loss, in the hope that global consumption of plastics will eventually catch up. Thereâs no guarantee when, or even whether, that happens. Should the global chemicals sector capitulate to the tidal wave of polymers flowing out of China and shut down, 2024âs demand surge might look like oilâs last gasp, before decline and fall set in.
More From Bloomberg Opinion:
03/04/2024 8:27 AM
James_BondHowâs your serba dinamik battleships, Mabel? Now sound like you betting big in Pchem? Going against the boycotting Petronas business by the revengeful Malay?
07/04/2024 12:37 PM
MabelJames_Bond Howâs your serba dinamik battleships, Mabel? Now sound like you betting big in Pchem? Going against the boycotting Petronas business by the revengeful Malay?
07/04/2024 12:37 PM
Haha Mr Bond,
Mabel thought Mr Bond should know everything...
Been in and out of SD many times. BUY LOW SELL HIGH and oledi locked profits.
Haha there are currently 3 types of Investors in Serba:
1. Bonus Issues Investors 2. Pre July21 Suspension Investors 3. Post July21 Suspension Investors
The one that benefits the most is Category 1 who was awarded Bonus Issues, Dividends and took price action during Dec 2020 rally. 2nd is Category 3 who took massive price action during July 2021 rally, Nov and Dec 2022 Pull Back. The Biggest loser are in Category 2 who freeze like Old Monks when they are supposed to take massive Price Action when it matters...
Meow
Stock: [SERBADK]: SERBA DINAMIK HOLDINGS BERHAD
Dec 29, 2022 10:51 AM | Report Abuse
whizzkid Mabel is the best! I knew it.. 15/07/2022 12:40 PM
Haha of course Mabel is the best..
Now you know why Blondi and Huang always loves to follow Mabel across i3 and walk 3 steps behind Mabel..
Keep pumping..
Meow Meow Meow
Stock: [SAPNRG]: SAPURA ENERGY BERHAD
Feb 22, 2024 10:31 AM | Report Abuse
#TalkNumberOne Mabel why siao lang sniffing you from behind all the time? Hahahađđđđđ 22/02/2024 8:51 AM
Hahaha...what do you expect from an Auntie who has been hibernating for 7 years?
Sure finish one after wake up...hihihi...
08/04/2024 1:24 PM
Mohd ImranRafifino worries, their management is confident that the industry will experience an upward cycle as the economy rebounds and demand aligns with supply, given the company's long-term commitment
09/04/2024 10:34 AM
James_BondComrades, letâs short Pchem for such poor profit performance!
09/04/2024 2:13 PM
MabelDo you know that Petronas is the Best Brand O&G Company in the World?
Check it out...
12/04/2024 10:19 AM
MabelDo you know that Petronas is the Best Brand O&G Company in the World?
MabelIf Iran attacks Israel, Middle East turmoil could lift oil past $100 a barrel Published: April 12, 2024 at 1:22 p.m. ET By Myra P. Saefong
Oil prices could rise by $15 a barrel if all of Iranâs output is interrupted: analyst
Oil traders know the all-too-familiar drill: Heightened tensions in the Middle East have led to a rally in prices â so far to the highest intraday levels in six months. If Iran, one of the worldâs largest oil producers, gets directly involved, however, a return to prices of more than $100 a barrel may soon follow. âNobody wants to be short heading into the weekend,â said Manish Raj, managing director at Velandera Energy Partners. âIf the conflicts escalate over the weekend, short sellers will lose their shirts when they wake up on Monday.â
15/04/2024 9:58 AM
MabelGeopolitics will hold the focus of markets to start the week after Iran's attack on Israel. An Israeli military spokesman said the country is prepared to do "whatever is necessary" in its defense. Tehran said it would attack with greater force if there was retaliation. Late Friday saw a flight to safety with money moving from equities to bonds and gold. Oil also gained on possibilities of production disruption in the Middle East.
