Petronas Chemicals Group saw its shares decline after analysts adjusted their target prices following a quarterly profit that fell short of expectations.
Share Performance
The Malaysian petrochemical company’s shares dropped by as much as 5.2%, with a recent decrease of 2.7% to 6.80 ringgit. This marks the largest one-day percentage loss in three months, while Malaysia’s benchmark Kuala Lumpur Composite Index experienced a 0.3% increase on Tuesday.
Quarterly Performance
Petronas Chemicals reported a significant decrease in fourth-quarter net profit, falling to MYR112 million from MYR481 million the previous year. This decline was attributed to lower product prices and sales volume, resulting in a 17% drop in quarterly revenue to MYR7.21 billion.
Analyst Projections
- TA Securities: Lowered target price to MYR7.45, citing a challenging near-term outlook due to weak demand.
- Affin Hwang Investment Bank: Reduced target price to MYR4.90 with a sell rating, highlighting market sluggishness and subdued product prices.
- Maybank Investment Bank: Maintained a sell rating and adjusted the target price to MYR5.05 following the earnings miss.
Future Outlook
Analysts anticipate an improvement in product spreads once demand increases by the end of 2024, driven by various economic factors such as China’s interest-rate reduction and potential rate cuts in advanced economies.
Petronas Chemicals may see better first-quarter earnings, supported by an enhanced plant utilization rate.
For more insights on the market performance and industry trends, stay tuned for further updates.