PETRONAS Chemicals Group Berhad (KLSE:PCHEM) - Share price, News & Analysis

PCHEM fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	0/6
Past Performance	6/6
Financial Health	5/6
Dividends	5/6

PCHEM Stock Overview

PETRONAS Chemicals Group Berhad, an investment holding company, manufactures, markets, and sells a range of petrochemical products worldwide.

Rewards

Trading at 41.4% below our estimate of its fair value

Earnings grew by 208.2% over the past year

Risk Analysis

Earnings are forecast to decline by an average of 7.6% per year for the next 3 years

Unstable dividend track record

PETRONAS Chemicals Group Berhad Competitors

Price History & Performance

Summary of all time highs, changes and price drops for PETRONAS Chemicals Group Berhad
Historical stock prices
Current Share Price	RM9.25
52 Week High	RM11.08
52 Week Low	RM7.80
Beta	0.39
1 Month Change	-6.28%
3 Month Change	-3.65%
1 Year Change	15.63%
3 Year Change	10.12%
5 Year Change	30.28%
Change since IPO	74.20%

Recent News & Updates

Jun 07

PETRONAS Chemicals Group Berhad's (KLSE:PCHEM) Intrinsic Value Is Potentially 55% Above Its Share Price

In this article we are going to estimate the intrinsic value of PETRONAS Chemicals Group Berhad ( KLSE:PCHEM ) by...

May 18

PETRONAS Chemicals Group Berhad (KLSE:PCHEM) Seems To Use Debt Rather Sparingly

Howard Marks put it nicely when he said that, rather than worrying about share price volatility, 'The possibility of...

Shareholder Returns

	PCHEM	MY Chemicals	MY Market
7D	-2.8%	-2.6%	-1.2%
1Y	15.6%	9.3%	-8.7%

Return vs Industry: PCHEM exceeded the MY Chemicals industry which returned 9.3% over the past year.

Return vs Market: PCHEM exceeded the MY Market which returned -8.7% over the past year.

Price Volatility

Is PCHEM's price volatile compared to industry and market?
PCHEM volatility
PCHEM Average Weekly Movement	2.7%
Chemicals Industry Average Movement	5.0%
Market Average Movement	5.5%
10% most volatile stocks in MY Market	11.4%
10% least volatile stocks in MY Market	2.9%

Stable Share Price: PCHEM is less volatile than 75% of MY stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: PCHEM's weekly volatility (3%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1985	n/a	Mohd Bin Mohamed Yusof	https://www.petronas.com

PETRONAS Chemicals Group Berhad, an investment holding company, manufactures, markets, and sells a range of petrochemical products worldwide. The company operates in two segments, Olefins and Derivatives, and Fertilisers and Methanol. It offers polymers comprising HDPE blown films, blow moulding, and pipes; linear low density polyethylene; and homopolymer, copolymer, and terpolymer polypropylene.

PETRONAS Chemicals Group Berhad Fundamentals Summary

How do PETRONAS Chemicals Group Berhad's earnings and revenue compare to its market cap?
PCHEM fundamental statistics
Market Cap	RM74.00b
Earnings (TTM)	RM7.96b
Revenue (TTM)	RM24.98b

9.3x

P/E Ratio

3.0x

P/S Ratio

Is PCHEM overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
PCHEM income statement (TTM)
Revenue	RM24.98b
Cost of Revenue	RM15.63b
Gross Profit	RM9.36b
Other Expenses	RM1.40b
Earnings	RM7.96b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Aug 22, 2022

Earnings per share (EPS)	0.99
Gross Margin	37.45%
Net Profit Margin	31.86%
Debt/Equity Ratio	7.1%

How did PCHEM perform over the long term?

See historical performance and comparison

Dividends

5.0%

Current Dividend Yield

46%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is PCHEM undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for PCHEM?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for PCHEM. This is calculated by dividing PCHEM's market cap by their current preferred multiple.
What is PCHEM's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	RM74.00b

PCHEM key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	2.5x
Enterprise Value/EBITDA	6.7x
PEG Ratio	-1.2x

Price to Earnings Ratio vs Peers

How does PCHEM's PE Ratio compare to its peers?

PCHEM PE Ratio vs Peers

The above table shows the PE ratio for PCHEM vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	14.5x

Forward PE

Price-To-Earnings vs Peers: PCHEM is good value based on its Price-To-Earnings Ratio (9.3x) compared to the peer average (14.5x).

Price to Earnings Ratio vs Industry

How does PCHEM's PE Ratio compare vs other companies in the Chemicals Industry?

Price-To-Earnings vs Industry: PCHEM is good value based on its Price-To-Earnings Ratio (9.3x) compared to the MY Chemicals industry average (12.6x)

Price to Earnings Ratio vs Fair Ratio

What is PCHEM's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

PCHEM PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	9.3x
Fair PE Ratio	14.8x

Price-To-Earnings vs Fair Ratio: PCHEM is good value based on its Price-To-Earnings Ratio (9.3x) compared to the estimated Fair Price-To-Earnings Ratio (14.8x).

Share Price vs Fair Value

What is the Fair Price of PCHEM when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: PCHEM (MYR9.25) is trading below our estimate of fair value (MYR15.78)

Significantly Below Fair Value: PCHEM is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: PCHEM's earnings are forecast to decline next year, so we can't calculate its PEG ratio.

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Future Growth

How is PETRONAS Chemicals Group Berhad forecast to perform in the next 1 to 3 years based on estimates from 18 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

-7.6%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: PCHEM's earnings are forecast to decline over the next 3 years (-7.6% per year).

Earnings vs Market: PCHEM's earnings are forecast to decline over the next 3 years (-7.6% per year).

High Growth Earnings: PCHEM's earnings are forecast to decline over the next 3 years.

Revenue vs Market: PCHEM's revenue is expected to decline over the next 3 years (-0.05% per year).

High Growth Revenue: PCHEM's revenue is forecast to decline over the next 3 years (-0.05% per year).

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: PCHEM's Return on Equity is forecast to be low in 3 years time (15.9%).

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Past Performance

How has PETRONAS Chemicals Group Berhad performed over the past 5 years?

Past Performance Score

6/6

Past Performance Score 6/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

4.5%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: PCHEM has high quality earnings.

Growing Profit Margin: PCHEM's current net profit margins (31.9%) are higher than last year (17.1%).

Past Earnings Growth Analysis

Earnings Trend: PCHEM's earnings have grown by 4.5% per year over the past 5 years.

Accelerating Growth: PCHEM's earnings growth over the past year (208.2%) exceeds its 5-year average (4.5% per year).

Earnings vs Industry: PCHEM earnings growth over the past year (208.2%) exceeded the Chemicals industry 15.6%.

Return on Equity

High ROE: PCHEM's Return on Equity (22.2%) is considered high.

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Financial Health

How is PETRONAS Chemicals Group Berhad's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: PCHEM's short term assets (MYR21.7B) exceed its short term liabilities (MYR5.1B).

Long Term Liabilities: PCHEM's short term assets (MYR21.7B) exceed its long term liabilities (MYR6.1B).

Debt to Equity History and Analysis

Debt Level: PCHEM has more cash than its total debt.

Reducing Debt: Insufficient data to determine if PCHEM's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: PCHEM's debt is well covered by operating cash flow (351.2%).

Interest Coverage: PCHEM's interest payments on its debt are well covered by EBIT (450.8x coverage).

Balance Sheet

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Dividend

What is PETRONAS Chemicals Group Berhad current dividend yield, its reliability and sustainability?

Dividend Score

5/6

Dividend Score 5/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

4.97%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: PCHEM's dividend (4.97%) is higher than the bottom 25% of dividend payers in the MY market (2.15%).

High Dividend: PCHEM's dividend (4.97%) is in the top 25% of dividend payers in the MY market (4.91%)

Stability and Growth of Payments

Stable Dividend: PCHEM's dividend payments have been volatile in the past 10 years.

Growing Dividend: PCHEM's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (46.2%), PCHEM's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonably low cash payout ratio (49.8%), PCHEM's dividend payments are well covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

2.4yrs

Average management tenure

CEO

Mohd Bin Mohamed Yusof (55 yo)

0.42

Tenure

Mr. Mohd Yusri Bin Mohamed Yusof, serves as Non-Independent Non-Executive Director of Engen Limited since August 2, 2017. Mr. Yusof serves as Managing Director, Chief Executive Officer at PETRONAS Chemical...

Leadership Team

Experienced Management: PCHEM's management team is considered experienced (2.4 years average tenure).

Board Members

Experienced Board: PCHEM's board of directors are considered experienced (3.9 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/06/25 00:00
End of Day Share Price	2022/06/24 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31