KUALA LUMPUR (July 17): Hong Leong Investment Bank (HLIB) Research has maintained its “Buy” rating on Ancom Nylex Bhd at RM1 with a lower target price (TP) to RM1.53 (from RM1.73), based on 17x FY2024f EPS (earnings per share), which is at a c.25% discount to its global peers’ average forward P/E multiple of 23x.

In a note on Monday (July 17), the research house said Ancom posted a record high net profit of RM75.12 million in its financial year ended May 31, 2023 (FY2023), a 10.2% increase from RM68.18 million in FY2022, while revenue increased to RM2.04 billion from RM2.01 billion a year earlier.

“In light of the potential for demand disruption for Ancom’s products due to the emergence of El Niño in Thailand and Malaysia, we are taking a conservative approach and trimming our FY(20)24f net profit estimates by 12%,” said its analyst Jeremie Yap.

Nevertheless, Yap said that Ancom’s performance for FY2023 came in within expectations at 97% and 99% of house and consensus full-year estimates.

“We think that Ancom is on-track for yet another record high in FY2024f, with the introduction of its two new active ingredients (AIs),” said Yap, namely Ancom’s Bromacil and Aster.

“We opine that the group’s next major growth driver will come from the roll-out of Chemical T — which is targeted to commence by [the] second quarter of FY2024,” said Yap.

In the early session on Monday (July 17), Ancom Nylex’s share price price remained unchanged at RM1.00, with a market capitalisation of RM974.92 million.

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Ancom Nylex posts record net profit of RM75.12m for FY2023