Petronas Chemicals Group Berhad, often abbreviated as Petronas Chemicals, is a major Malaysian petrochemical company. Established in 1985, it's a partially owned subsidiary of the national oil and gas giant Petronas. Petronas Chemicals plays a key role in Malaysia's chemical industry, producing a wide range of chemical products for various industries.
The company's core business includes manufacturing olefins, polymers, fertilisers, and methanol. These products find applications in countless everyday items, from plastic packaging and clothing to building materials and agriculture. Petronas Chemicals operates throughout Malaysia and has international ventures across Asia and Europe. Petronas Chemicals' shares are listed on the Bursa Malaysia under the ticker code PCHEM.
YOUR CAPITAL IS AT RISK
Petronas Chemicals EPS and Revenue Breakdown 2020-2023
| Source: TradingView | Annual EPS | Annual Revenue |
|---|---|---|
| 2020 | MYR 0.20 | MYR 14.36 billion |
| 2021 | MYR 0.92 | MYR 23.02 billion |
| 2022 | MYR 0.79 | MYR 28.95 billion |
| 2023 | MYR 0.21 | MYR 28.67 billion |
Dividend & Industry Comparison
Petronas Chemicals Share Price, Chart & Dividend Yield
Petronas Chemcials shares have struggled over the past couple of years after hitting a high of above MYR10 back in early 2022. Since (as of July 2024) it has been all downhill, barring a brief rise in Q3 2023. The stock is currently down over 16% in the last 12 months.
Dividend Yield: 2.17%
YOUR CAPITAL IS AT RISK
Petronas Chemicals Share Price Forecast
Data compiled by TradingView shows that out of 18 investment analysts covering PCHEM shares, one has a Buy rating on the stock, with eight assigning it a Hold rating and nine a Sell rating. Here is the bull and bear case for the stock:
The Bull Argument: In late 2023, MIDF Research upgraded Petronas Chemicals Buywith a new target price of RM7.61 per share. The firm noted that PCHEM had made a final investment decision to construct a chemical recycling plant in Pengerang with a capacity of 33kTpa, operational by CY26. “In consideration of this update and the possible prospect of a better climate for the petrochemical market in CY24 in regards of the elevated Brent crude prices, we upgrade our earnings estimates for FY25 and FY25 up by 13% and 6%, respectively,” said the firm at the time.
The Bear Argument: Analysts at BIMB noted that PCHEM's most recent earnings results came in below consensus estimates. The firm said in its May 30, 2024, note that there were signs of “initial recovery in market demand, particularly as clients begin restocking its inventories.” However, they added that “the market is overly optimistic with the recovery.” Therefore, the firm kept a Sell rating on the stock, lowering the target to MYR 6. “We advise investors to revisit at [a] lower level,” concluded BIMB analysts.
Average Analyst Consensus 12-Month Price Target: MYR 6.89
Who Should Buy Petronas Chemicals Shares
Petronas Chemicals offers an attractive opportunity for a variety of investors, but as always, careful evaluation of your investment goals and the company's position is crucial. Here are some investor types that might find Petronas Chemicals appealing:
Investors Seeking Exposure to the Chemical Industry: If you're looking for exposure to the growing chemical sector, particularly in Asia, Petronas Chemicals is a strong contender. Their diversified product portfolio positions them well to capture growth in numerous end-markets.
Long-Term Growth Investors: With a long-term outlook and belief in the sustained demand for chemicals in construction, packaging, agriculture, and other sectors, Petronas Chemicals could be a compelling investment.
Dividend-Seeking Investors: Petronas Chemicals has a history of consistent dividend payouts, making it attractive to investors seeking regular income from their investments. Their strong financial performance suggests the potential for continued dividend distributions.
Bargain Hunters: Given the decline in PCHEM's share price since 2022, investors looking for a stock that they believe could be undervalued may want to assess the company further.
Investors Seeking a Reputable Malaysian Company: Petronas Chemicals' association with the national oil and gas giant Petronas provides a sense of stability and established presence within the Malaysian market. This can be appealing to investors seeking reliable Malaysian companies with a proven track record.
