KLCI Stock - PCHEM / 5183 - 2012 Quarter 1

PETRONAS CHEMICALS GROUP BERHAD



Company Description

PETRONAS CHEMICALS GROUP BERHAD is a Malaysia-based petrochemical producer. The Company is engaged in manufacturing, marketing and selling diversified petrochemical products, including olefins, polymers, fertilizers, methanol, glycols and other basic chemicals and derivative products. Its business segments are olefins and polymers segment and fertilizers and methanol segment. It has three manufacturing complexes in Gurun, Bintulu and Labuan that produce fertilizers and methanol products, as well as a polyvinyl chloride (PVC) plant in Vung Tau, Vietnam. The Company is part of the PETRONAS Group.

Company Info 

Listing Date	2010-11-26
IPO Price	5.2
Market Capital (Capital Size)	52,640,000,000 (Very Large)
Par Value	RM 0.10
Board	Main
Sector	Industrial Products
Major Industry	Petrochemicals Producer
Sub Industry	Agro-chem & Oleochemical Products Manufacturer
Website	http://www.petronaschemicals.com/

My Analysis 

Forecast P/E now	(6.58-0.16)/0.4631 = 13.86 (Moderate)
Target Price	7.41+0.16 = 7.57 (PE 16.0, EPS 0.4631, DPS 0.16)
Decision	BUY if stock price strong sustain above 6.65 or wait near to 6.42 and got strong buy volume
Comment	Revenue increased 12.4% and also higher than preceding year corresponding quarter 0.9%, eps increased 38.6% and also higher than preceding year corresponding quarter 9.4%, cash generated from operating more than enough to cover all expenses, maintain high margin, stronger liquidity ratio from moderate to high level now, lower gearing ratio at below moderate level now, lower debt ratio at healthy level now, all collection/repayment period is good, higher inventory can indicate better demand of products, all segment business still good performance
First Support Price	6.42
Second Support Price	6.26
Risk Rating	MODERATE

Research House

MIDF Target Price	6.1 (2012-02-28)
AMMB Target Price	6.8 (2012-05-29)
CIMB Target Price	7.9 (2012-05-29)
ECM Target Price	7.69 (2012-05-29)
OSK Target Price	9 (2012-05-29)
HwangDBS Target Price	5.9 (2012-05-30)
RHB Target Price	6.84 (2012-05-30)
Maybank Target Price	7.5 (2012-06-14)
Kenanga Target Price	7.46 (2012-06-26)

Accounting Ratio 

Return on Equity	18.62%
Dividend Yield	2.43%
Gross Profit Margin	37.98%
Operating Profit Margin	32.33%
Net Profit Margin	33.40%
Tax Rate	23.53%
Asset Turnover	0.5903
Net Asset Value Per Share	2.39
Net Tangible Asset per share	2.38
Price/Net Tangible Asset Per Share	2.82
Cash Per Share	1.23
Liquidity Current Ratio	3.1467
Liquidity Quick Ratio	2.8202
Liquidity Cash Ratio	2.2972
Gearing Debt to Equity Ratio	0.3248
Gearing Debt to Asset Ratio	0.2315
Working capital per thousand Ringgit sale	57.9%
Days to sell the inventory	47
Days to collect the receivables	49
Days to pay the payables	61

Technical Analysis 

SMA 20	6.494 (Uptrend 3 days)
SMA 50	6.482 (Uptrend)
SMA 100	6.579 (Downtrend)
SMA 200	6.294 (Uptrend)
MACD (26d/12d)	0.016158 ( 0.004002 )
Signal (9)	0.00576 ( 0.002599 )
MACD Histogram	0.010398 (Bullish trend 3 days)
Bolinger Upper Band	6.645
Bolinger Lower Band	6.343

My notes based on 2012 quarter 1 report (number in '000):-
- Higher revenue due to higher production and plant utilisation achieved in both segments. Whilst the corresponding quarter had higher level of plant maintenance activities which led to lower production, sales volume was maintained through trading activities

- However, profit for the quarter was lower by RM93 million or 8% at RM1.1 billion. This follows lower contribution from our associate and jointly controlled entity due to lower production and full utilisation of tax benefits in one of the associate companies. Tax expense was also lower in the corresponding quarter as it included the recognition of deferred tax assets in a subsidiary

- The Olefins and Derivatives business segment was subdued and global economic uncertainty and its dampening effect on demand exerted some downward pressure on prices

- Fertilisers and Methanol market conditions were more favourable. Urea price was stronger in line with increased US and Latin American demand, and regional supply constraints. Similarly, methanol price also improved due to robust demand from China and South East Asia coupled with limited supply in the market following shutdowns and lower operating rates at several methanol producers

- Estimate next 4Q eps after 2011 Q7 result announced = 20582000*0.18/8000000 = 0.4631, estimate PE on current price 6.58 = 13.86(DPS 0.16)
- Estimate next 4Q eps after 2011 Q7 result announced = 21622000*0.16/8000000 = 0.4324, estimate highest/lowest PE = 15.68/14.29 (DPS 0.16)
- Estimate next 4Q eps after 2011 Q6 result announced = (0.0921+0.1436)*2*1.1 = 0.5185, estimate highest/lowest PE = 13.19/10.82 (DPS 0.19)
- Estimate next 4Q eps after 2011 Q5 result announced = (0.0921+0.105)*2*0.95 = 0.3745, estimate highest/lowest PE = 16.85/13.46 (DPS 0.19)
- Estimate next 4Q eps after 2011 Q4 result announced = 0.1165*4 = 0.466, estimate highest/lowest PE = 15.15/12.45 (DPS 0.19)

- Yearly net eps, 2008 = 0.491, 2009 = 0.352, 2010 = 0.275

PCHEM latest news (English)

PCHEM latest news (Chinese)



Financial Quarter Summary

a_date	year	qrt	h_price	l_price	div	roe	c_roe	rev	c_rev	pbt	c_pbt	prof	c_prof	eps	c_eps	asset	liab	mino	equi	cfo	cfi	cff	cash	fcf	net	final	share	c_share	m_cap	date	gros_m	oper_m	prof_m	vat	asset_t	pe	navps	ntaps	p/ntaps	cps	l_cur	l_qui	l_cash	g_de	g_da	avg_w	inv_d	rec_d	pay_d
2012-05-28	2012	1	N/A	N/A	-	4.86%	4.86%	4389000	4389000	1466000	1466000	1019000	1019000	0.1274	0.1274	26783000	6201000	1489000	20582000	923000	172000	322000	9269000	751000	429000	9698000	8000000	8000000	53600000	2012-03-31	37.98%	32.33%	33.40%	23.53%	0.5903	-	2.39	2.38	2.82	1.23	3.1467	2.8202	2.2972	0.3248	0.2315	57.9%	47	49	61
2012-02-27	2011	7	6.94	6.34	0.08	3.86%	13.76%	3904000	11887000	1139000	3897000	735000	2621000	0.0919	0.3276	26095000	6453000	1550000	19642000	4350000	136000	3989000	8769000	4486000	497000	9266000	8000000	8000000	55200000	2011-12-31	34.38%	28.46%	29.18%	27.48%	0.6223	-	2.26	2.26	3.05	1.17	2.7667	2.4703	2.0738	0.3567	0.2473	49.2%	47	38	69
2011-11-22	2011	6	7.03	5.8	-	6.03%	9.90%	4638000	7983000	1700000	2758000	1149000	1886000	0.1436	0.2358	28344000	6805000	1560000	21539000	2757000	157000	3227000	8843000	2914000	313000	8530000	8000000	8000000	47520000	2011-09-30	39.76%	35.12%	36.65%	25.18%	0.5727	-	2.5	2.24	2.65	1.08	2.734	2.4411	1.9408	0.3406	0.2401	47.6%	45	48	65
2011-08-26	2011	5	6.5	5.23	0.08	3.87%	3.87%	3345000	3345000	1058000	1058000	737000	737000	0.0921	0.0921	29352000	7602000	1438000	21750000	1303000	123000	404000	8821000	1426000	1022000	9843000	8000000	8000000	48240000	2011-06-30	35.25%	29.33%	31.63%	23.06%	0.5031	-	2.54	2.28	2.64	1.24	5.7333	5.1549	4.4239	0.3743	0.259	72.0%	46	37	62
2011-05-26	2011	4	7.25	5.99	0.19	4.89%	15.72%	4353000	14586000	1298000	4260000	932000	2994000	0.1165	0.3955	29350000	8366000	1406000	20984000	1473000	1229000	1143000	7434000	244000	1387000	8821000	8000000	7569301	57280000	2011-03-31	31.93%	26.81%	29.82%	10.63%	0.4969	18.1016	2.59	2.3	3.11	1.11	4.2024	3.8087	2.9923	0.4273	0.285	65.4%	42	58	84
2011-02-24	2011	3	7.61	6.22	-	4.59%	10.83%	3898000	10233000	1275000	2962000	874000	2062000	0.1163	0.2790	27281000	7134000	1416000	20147000	261000	978000	1298000	7437000	1239000	59000	7496000	7513796	7389458	46660673	2010-12-31	31.04%	26.83%	32.71%	21.65%	0.5215	-	2.53	2.25	2.76	1.01	4.81	4.3106	3.2753	0.3809	0.2615	62.2%	43	58	62
2010-11-29	2011	2	6.39	5.3	-	2.64%	6.24%	3170000	6335000	704000	1687000	503000	1188000	0.0689	0.1627	22869000	7140000	1341000	15729000	639000	1047000	2376000	7438000	1686000	4062000	3376000	7300000	7300000	39420000	2010-09-30	24.13%	18.04%	22.21%	18.75%	0.5822	-	1.97	1.7	3.18	0.48	2.6923	2.1791	1.44	0.4962	0.3122	30.7%	48	45	67
N/A	2011	1	N/A	N/A	-	3.27%	3.27%	3162000	3162000	982000	982000	623000	623000	0.0853	0.0853	N/A	N/A	-	N/A	373000	64000	649000	7443000	309000	340000	7103000	7300000	7300000	N/A	2010-06-30	29.82%	27.42%	31.06%	25.76%	N/A	-	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	-	N/A	N/A
N/A	2010	4	N/A	N/A	-	N/A	N/A	3996000	12203000	1322000	3368000	881000	2199000	0.1207	0.3012	26892000	7844000	1979000	19048000	4209000	272000	3473000	6979000	3937000	464000	7443000	7300000	7300000	N/A	2010-03-31	37.34%	31.61%	33.08%	27.16%	0.3668	-	2.34	2.17	N/A	1.04	2.0829	1.8547	1.4007	0.4595	0.2917	59.2%	65	83	250
N/A	2010	3	N/A	N/A	-	N/A	N/A	2986000	8207000	589000	2046000	337000	1317000	0.0462	0.1804	N/A	N/A	-	N/A	3087000	17000	2057000	6918000	3104000	1047000	7965000	7300000	7300000	N/A	2009-12-31	23.54%	19.39%	19.73%	20.20%	N/A	-	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	-	N/A	N/A
N/A	2010	2	N/A	N/A	-	N/A	N/A	2883000	5221000	822000	1457000	552000	980000	0.0756	0.1342	N/A	N/A	-	N/A	1728000	279000	424000	6922000	2007000	1583000	8505000	7300000	7300000	N/A	2009-09-30	26.22%	28.23%	28.51%	19.95%	N/A	-	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	-	N/A	N/A

Financial Quarter Balance Sheet

year	qrt	Deferred tax assets (A-0)	Intangible assets (A-0)	Investment in associated companies (A-0)	Investment in jointly controlled entity (A-0)	Property, plant and equipment (A-0)	Receivables (A-0)	Cash and cash equivalents (A-1)	Current tax assets (A-1)	Inventories (A-1)	Other investments (A-1)	Trade receivables (A-1)	Deferred tax liabilities (L-0)	Loans & borrowings (L-0)	Other liabilities (L-0)	Current tax liabilities (L-1)	Loans & borrowings (L-1)	Trade and other payables (L-1)	Minority interest (M-1)
2012	1	457000	24000	708000	65000	12051000	51000	9802000	121000	1393000	-	2111000	1275000	241000	418000	410000	2061000	1796000	1489000
2011	7	484000	26000	651000	71000	12295000	54000	9380000	122000	1341000	-	1671000	1259000	241000	430000	387000	2152000	1984000	1550000
2011	6	532000	2056000	728000	82000	12697000	58000	8644000	114000	1306000	10000	2117000	1645000	245000	456000	382000	2181000	1896000	1560000
2011	5	605000	2099000	745000	75000	12895000	56000	9926000	127000	1299000	10000	1515000	1634000	3279000	443000	201000	310000	1735000	1438000
2011	4	623000	2142000	875000	70000	13057000	64000	8904000	124000	1173000	10000	2308000	1638000	3282000	467000	204000	407000	2368000	1406000
2011	3	456000	2072000	745000	74000	12741000	29000	7582000	124000	1159000	20000	2279000	1421000	3367000	25000	238000	403000	1680000	1416000
2011	2	497000	1997000	872000	74000	12889000	30000	3462000	153000	1241000	20000	1634000	1434000	3261000	27000	231000	447000	1740000	1341000
2010	4	491000	1211000	822000	107000	12992000	32000	7532000	212000	1231000	25000	2237000	1167000	1254000	28000	38000	623000	4734000	1979000

Financial Quarter Income Statement

year	qrt	Revenue	Income tax expense	Cost of sales	Finance/interest costs	Other income	Administrative/Operating expenses	Minority interest	Share of profit/ (loss) of associates	Selling and distribution costs	Other expenses
2012	1	4389000	345000	2722000	25000	100000	132000	102000	72000	183000	33000
2011	7	3904000	313000	2562000	26000	78000	154000	91000	54000	138000	17000
2011	6	4638000	428000	2794000	33000	165000	153000	123000	104000	161000	66000
2011	5	3345000	244000	2166000	38000	98000	172000	77000	115000	111000	13000
2011	4	4353000	138000	2963000	33000	81000	165000	228000	164000	108000	31000
2011	3	3898000	276000	2688000	35000	74000	134000	125000	264000	98000	6000
2011	2	3170000	132000	2405000	24000	30000	120000	69000	156000	103000	-
2011	1	3162000	253000	2219000	15000	120000	77000	106000	130000	77000	42000
2010	4	3996000	359000	2504000	13000	63000	78000	82000	72000	115000	99000
2010	3	2986000	119000	2283000	25000	44000	84000	133000	35000	76000	8000
2010	2	2883000	164000	2127000	8000	226000	86000	106000	16000	82000	-

Financial Quarter Segments Revenue

year	qrt	Others	Olefins and Derivatives	Fertilisers and Methanol
2012	1	13000	3231000	1145000
2011	7	9000	2923000	972000
2011	6	12000	3475000	1151000
2011	5	8000	2406000	931000
2011	4	9000	3320000	1033000
2011	3	10000	3069000	810000
2011	2	25000	2540000	608000
2011	1	11000	2288000	863000
2010	4	14000	3122000	860000
2010	3	16000	2253000	717000
2010	2	32000	3880000	1309000

Financial Quarter Segments Profit

year	qrt	Others	Olefins and Derivatives	Fertilisers and Methanol
2012	1	18000	820000	319000
2011	7	35000	615000	246000
2011	6	20000	912000	380000
2011	5	5000	611000	198000
2011	4	90000	1124000	129000
2011	3	67000	864000	66000
2011	2	16000	613000	56000
2011	1	2000	551000	176000
2010	4	13000	867000	110000
2010	3	40000	363000	67000
2010	2	228000	818000	114000

Short form reference
a_date = announcement date, yr = financial year end, qrt = quarter
h_price = stock highest price during the quarter, l_price = stock lowest price during the quarter
div = dividend recommend or declare in the quarter, roe = return on equity
c_roe = cumulative of return on equity during the financial year
rev = revenue in the current quarter, c_rev = cumulative of revenue during the financial year
pbt = profit before tax in the current quarter, c_pbt = cumulative of profit before tax during the financial year
eps = earnings per share in the current quarter, c_eps = cumulative of earnings per share during the financial year
asset = total asset, liab = total liability, mino = minority interest, equi = total equity
cfo = net cash flow from operating activities, cfi = net cash flow from investing activities
cff = net cash flow from financing activities, cash = cash and cash equivalents as at beginning of financial year
final = cash and cash equivalents as at current financial period ended
share = diluted/basic weighted average number of ordinary shares
c_share = cumulative of diluted/basic weighted average number of ordinary shares during the financial year
m_cap = market capital at announcement date of quarterly report, date = current financial period ended date
prof_m = profit margin, vat = income tax rate, pe = price earning per share ratio of recent four quarter
navps = net asset value per share, ntaps = net tangible asset per share, cps = cash per share
l_cur = liquidity current ratio, l_qui = liquidity quick ratio, l_cash = liquidity cash ratio
g_de = gearing debt to equity ratio, g_da = gearing debt to assets ratio
avg_w = working capital per thousand Ringgit sale
inv_d = days to sell the inventory, rec_d = days to collect the receivables
pay_d = days to pay the payables

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