KUALA LUMPUR (Nov 5): Shares of Petronas Chemicals Group Bhd (KL:PCHEM) fell to their lowest in four and a half years after dropping 44 sen or 8.04% to close at RM5.03 on Tuesday, a level last seen in April 2020, as expectations mount that the group would be posting weaker results.

The counter, which dived from around 2.30pm on Tuesday, was the biggest loser of the day across Bursa. It saw 19.15 million shares change hands — nearly 4.5 times higher than its 200-day moving average. At RM5.03, the group has a market capitalisation of RM40.32 billion.

Year-to date, the stock, which has been sliding since mid-May, has fallen 29.7%.

One market watcher said anticipation is rising that PetChem might be issuing a negative profit guidance prior to the release of its results later this month.

This comes amid expected foreign exchange losses and a step up in depreciation charges at PetChem’s Pengerang facilities, he said.

Local institutions were the major sellers of the stock on Tuesday, another industry watcher observed.

At press time, the company has yet to respond to requests for comments from The Edge.

During the second quarter results reporting season in August, PetChem had already flagged that its plant turnarounds planned for the remaining months of 2024 might weigh on its output and volume.

These statutory turnaround activities in the oil and gas industry usually involve shutting down some refineries' operations for maintenance or upgrades. Such turnarounds are typically planned extensively, due to the cost involved and potential revenue loss.

Analysts had also projected that PetChem would see weaker earnings in the second half of FY2024, due to lower average selling prices (ASPs) in the olefins and derivatives segment, and larger-than-expected losses at the Pengerang Integrated Complex (PIC).

Analysts covering PetChem are mostly neutral or negative on the stock. Based on Bloomberg’s compilation, seven have it on “sell” while another seven put it on “hold”; only three have it on “buy”.

Based on 17 analysts’ ratings, the average twelve-month target price for the stock was RM5.53.

For its first half ended June 30, 2024 (1HFY2024), PetChem’s net profit rose 25% to RM1.45 billion from RM1.16 billion a year ago, helped by higher sales volume and finance income. Its cumulative revenue edged up 3.8% to RM15.23 billion from RM14.67 billion.