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DATE: 28 DECEMBER 2017
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THE STOCK : PCHEM
PETRONAS CHEMICALS GROUP BHD
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Current Price : RM7.80
Target Price : RM8.50
Warrant : PCHEM-C13 (0.23cts) : TP '0.30cts++++++'
This stock has been alerted and called yesterday by Kim. Its massive moved. Started at RM7.60 on 27th December and today we keep follow and released our target here.
Tomorrow this stock still
in our radar and expect to move higher to break RM7.80 & 7.81 as a
strong resistance. Success to do so, will bring it higher to test
RM8.00.
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WHAT KIM SAY?
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"Saudi
Aramco’s decision to invest up to US$7bil in the Rapid refining complex
in Malaysia is positive for the project’s outlook, and significantly
reduces the financial burden placed on operator Petronas. The deal would
help to lock-in future demand for Saudi crudes from Malaysia, which is
set to swing to a net importer by 2020". - Kim Spartan
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THE PROFILE
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PETRONAS Chemicals Group Berhad (PCG) is the leading integrated chemicals producer in Malaysia and one of the largest in South East Asia. We operate a number of world class production sites, which are fully integrated from feedstock to downstream end-products.
With a total combined production capacity
of 10.8 million metric tonnes per annum (mtpa), we are involved
primarily in manufacturing, marketing and selling a diversified range of
chemical products, including olefins, polymers, fertilisers, methanol
and other basic chemicals and derivative products. Listed on Main Market
Bursa Malaysia Securities Berhad (Bursa Malaysia) and with nearly three
decades of experience in the chemicals industry, PCG was established as
part of the PETRONAS Group to maximise value from Malaysia's natural
gas resources.
Comprises 25 Companies
Producing a wide range of chemical products.
Two major operating business segments:
1) Olefins and Derivatives
2) Fertilisers and Methanol
Two integrated petrochemical complexes:
1) Kertih, Terengganu
2) Gebeng, Pahang
Three manufacturing complexes that produce fertilisers and methanol:
1) Gurun, Kedah
2) Bintulu, Sarawak
3) Federal Territory of Labuan
Total production capacity
of over 10 million mtpa
Largest producer of methanol
in South East Asia and fourth largest in the world *
Third largest producer
of granular urea and the fourth largest producer of urea in South East Asia*
Sole Producer
of methanol, urea, paraxylene, methyl tertiary butyl ether (MTBE), ethanolamines, ethoxylates, glycol ethers, butanol and butyl acetates in Malaysia.
Joint-venture partners
including BASF, BP Chemicals, Idemitsu Kosan, Mitsubishi Corporation and Sasol Limited.
Producing a wide range of chemical products.
Two major operating business segments:
1) Olefins and Derivatives
2) Fertilisers and Methanol
Two integrated petrochemical complexes:
1) Kertih, Terengganu
2) Gebeng, Pahang
Three manufacturing complexes that produce fertilisers and methanol:
1) Gurun, Kedah
2) Bintulu, Sarawak
3) Federal Territory of Labuan
Total production capacity
of over 10 million mtpa
Largest producer of methanol
in South East Asia and fourth largest in the world *
Third largest producer
of granular urea and the fourth largest producer of urea in South East Asia*
Sole Producer
of methanol, urea, paraxylene, methyl tertiary butyl ether (MTBE), ethanolamines, ethoxylates, glycol ethers, butanol and butyl acetates in Malaysia.
Joint-venture partners
including BASF, BP Chemicals, Idemitsu Kosan, Mitsubishi Corporation and Sasol Limited.
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PETCHEM'S FIVE KEY PROJECTS
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1. Sabah Ammonia Urea (Samur) Project
Project Update: Currently, both ammonia and urea plants are running at 100% full capacity.
As of April 2017, a total of 148,813 tonnes of ammonia and 187,300 tonnes of urea had been produced. Majority of Samur products are exported to Thailand (51%), Australia (25%) and to other Asean countries.
Background: The Samur Project represents PetChem’s continuous effort to meet market demands for urea, especially in the South-East Asia region. The project will add 1.2 million metric tons per annum (mtpa) of urea production to PetChem’s existing 1.4 million mtpa capacity, positioning it as the second largest urea producer in South-East Asia.
2. Integrated Aroma Ingredients Complex
Project Update: The commissioning and start-up process of the integrated aroma ingredients complex is progressing well to meet the range of 2017 start-up schedule.
Background: The Integrated Aroma Ingredients Complex in Gebeng, Pahang, is a joint venture project undertaken together with BASF through our associate company, BASF Petronas Chemicals Sdn Bhd. Citral, citronellol and L-menthol, are aroma ingredients, to meet the high demand from the rapidly growing fragrance and flavour industries.
This project, that is first to use BASF’s technology outside Europe, marks PetChem’s foray into the highly attractive niche and specialty play, which are less affected by cyclicality compared to commodity chemicals. Aroma ingredients are sold to the flavour and fragrance industry, mainly in home and personal care products and in the food industry as well as pharmaceutical applications.
3. 2-Ethylhexanoic Acid (2-EHAcid) Project
Project Update: On specification 2-EHAcid was successfully produced and delivered to overseas customers in late 2016
Background: The 2-EHAcid plant in Gebeng Pahang, undertaken together with BASF through our associate company, BASF Petronas Chemicals Sdn Bhd is the first of its kind in South-East Asia and will benefit from the integration with its current facilities in Gebeng. Product application include as a chemical compound in the production of synthetic lubricants, as well as oil additives and functional fluids like automotive coolants, and other uses in various industries.
4. Highly Reactive Polyisobutene (HR-PIB) Project
Project Update: HR-PIB is expected to be commissioned in the fourth quarter of 2017 as planned.
Background: PetChem has sanctioned the development and construction of a new world-scale HR-PIB plant at its associate company, BASF Petronas Chemicals Sdn Bhd, to add further value to its existing business at Petronas Chemicals MTBE Sdn Bhd in Gebeng, Pahang. Product functions include as intermediate product for the manufacturing of high-performance fuel and lubricant additives.
5. Pengerang Integrated Complex (PIC) Project
Project Update: As at end March 2017, the Pengerang Integrated Complex (PIC) development is around 62% overall project progress. This project is progressing well whereby to date the overall petchem project for polymer and glycol is more than 30% and slightly ahead of schedule.
On April 18, 2017, PCG approved the final investment decision for an isononanol plant at Pengerang Integrated Complex. This is yet another strategy of PCG to grow further in specialty chemicals.
Background: The petrochemical projects in PIC, which are scheduled to be operationalised in 2019, are significant growth projects for PetChem to broaden its product portfolio and further diversify into derivatives, specialty chemicals and solutions, while expanding PetChem’s existing production capacity.
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THE KEYNOTE
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FEB 2017
PCHEM - Petronas Chemicals Group Bhd's (PetChem) net profit for the fourth quarter ended Dec 31, 2016 (4QFY16) rose 40.2% to RM987 million or 12 sen per share from RM704 million or 9 sen per share a year ago, due to higher sales volumes, lower unit cost, favourable spreads and stronger US dollar. Revenue increased 14.44% to RM3.95 billion in 4QFY16 from RM3.45 billion in 4QFY15. The group declared a second interim dividend of 12 sen per share for the financial year ending Dec 31, 2016, payable on Mar 21, 2017.
PCHEM - Petronas Chemicals Group Bhd's (PetChem) net profit for the fourth quarter ended Dec 31, 2016 (4QFY16) rose 40.2% to RM987 million or 12 sen per share from RM704 million or 9 sen per share a year ago, due to higher sales volumes, lower unit cost, favourable spreads and stronger US dollar. Revenue increased 14.44% to RM3.95 billion in 4QFY16 from RM3.45 billion in 4QFY15. The group declared a second interim dividend of 12 sen per share for the financial year ending Dec 31, 2016, payable on Mar 21, 2017.
MAR 2017
PCHEM -
The investment of Saudi Arabia’s Aramco in the Refinery and
Petrochemical Integrated Development (Rapid) project in Pengerang,
Johor, is positive for Petroliam Nasional Bhd (Petronas) and the project
itself.
APR 2017
PCHEM -
Petronas Chemicals Group Bhd (PetChem) has approved a final investment
decision for an Isononanol plant within the Pengerang Integrated Complex
in Pengerang, Johor, for a total investment cost of US$442 million
(RM1.95 billion).The petrochemical arm of Petroliam Nasional Bhd
(Petronas) said the project is expected to come on-stream by the second
half of 2019 and will be undertaken by a wholly-owned subsidiary.
MAY 2017
PCHEM - Petronas
Chemicals Group Bhd's first quarter net profit rose 120% to RM1.3
billion from a year earlier as revenue grew on higher output, sales
volume and product prices. Petronas Chemicals manufactures olefins,
fertilisers and methanol. Petronas Chemicals said net profit rose to
RM1.3 billion from RM592 million, while revenue climbed to RM4.7 billion
from RM3.15 billion.
AUG 2017
PCHEM -
Petronas Chemicals Group Bhd's (PetChem) second quarter net profit rose
109% to RM964 million, from RM462 million a year earlier, as revenue
increased on higher sales volume and prices. PetChem said revenue
climbed to RM3.96 billion in the second quarter ended June 30, 2017
(2QFY17), from RM3.2 billion in 2QFY16.
OCT 2017
PCHEM - Petronas
Chemicals Group Bhd (PCG) is selling a 50% stake in wholly-owned unit
PRPC Polymers Sdn Bhd to Saudi Arabian Oil Co's (Saudi Aramco)
subsidiary under a planned estimated US$900 million (RM3.8 billion) deal
to share PRPC Polymers' business risk. PCG said it was selling the 50%
stake in PRPC Polymers to Saudi Aramco's wholly-owned subsidiary Aramco
Overseas Holdings Coöperatief U.A. (AOHC). PCG said the estimated US$900
million deal includes the divestment of 50% of any shareholder loans
held by PCG in PRPC Polymers to AOHC.
PCHEM - Company
gets huge capital boost from polymer plant deal with Saudi Aramco.
Given the earlier announcement that Saudi Aramco will be investing
US$7bil in the Refinery and Petrochemical Integrated Development (Rapid)
project in Pengerang, Johor, it did not come as a big surprise when
Petronas Chemicals Group Bhd(PetChem) inked a new deal with the state
oil company of Saudi Arabia.
NOV 2017
PCHEM -
Petronas Chemicals Group Bhdreported an improved set of financial
results in the third quarter ended Sept 30, 2017, underpinned by the
fertilisers and methanol segment. Its earnings rose 2.4% to RM913mil
from RM891mil a year ago. Earnings per share were flat at 11 sen.
Revenue rose at a stronger pace of 12.6% to RM4.01bil from RM3.56bil
primarily driven by higher prices and strengthening US dollar as well as
higher sales volumes.
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THE FINANCIAL
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Regards,
Kim Stockwatch
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