Target Invest - We Target, We Invest
I INVESTED IN LCTITAN FOR 5 REASONS, AND THE LAST REASON JUST GAVE MY INVESTMENT MORE SPICE AND EXCITEMENT
Blog https://targetinvest88.blogspot.com
Telegram https://t.me/targetinvest88
If you do follow my on TargetInvest Telegram, or if you do read my blog posting, you would know by now that I take interest in LCTITAN due to several reason
1. Sharp discount to NTA
Current share price is an attractive 80% discount to the NTA of almost RM 5. With the IPO at RM 6.50, the current share price is very attractive compared to IPO investor a few years ago.
2. Demand uptrend on US interest rate reduction
Petroleum Chemical, Specialty Chemical looking at a rebound as manufacturing look forward to picking up steam as US start to reduce interest rate gradually to stem out a potential recession.
3. Oversupply issue to see an end
China destocking is almost complete going into 3Q 2024. New demand will pick up on 4Q 2024
4. Chemical plant shut down
China closing down smaller chemical plants which have less than 300k ton annual production output. This is in line with China tightening environment regulation. Europe also have plant shut down due to the price pressure.
5. Potential take-over target for Petronas
Lctitan has initiated intention of selling its 75% stake in the Malaysia outfit. Malaysia only potential buyer is Petronas Chemical, which at the same time looking to expand more into specialty chemical as it seeks to replace the revenue lost in Sarawak upstream oil and gas business.
While all the factors are good and interesting, the oil and gas development in Malaysia made it even more interesting as Sarawak take back control on all upstream oil and gas business. (Now start with gas portfolio). Petronas play a very important role in the national coffer, especially when it comes to subsidies. However, as PETROS start to take back upstream business in Sarawak, Petronas will stand to take a potential hit of around RM 100 billion in annual revenue.
Ever since the discussion and start of MA63 in 2018, I noticed that Petronas Chemical had started out acquiring chemical company in a very aggressive manner.
In 2019, Petronas Chemical acquire Da Vinci Group B.V.
Then head on to BASF PETRONAS
It also acquired Perstorp in Sweden for RM 10.5 billion
The series of aggressive acquisition had probably sent an underlying message that Petronas is looking to expand the oil and gas downstream business (Chemical division) in order to replace the revenue lost from the asset handover to Sarawak, which is probably looking to complete in Jan 2025.
"While there has not been any formal announcement of a definitive agreement on the transition from Petronas to Petros, Sarawak’s Minister of Utility and Telecommunication Datuk Seri Julaihi Narawi reportedly said that the parties have agreed to sign a definitive agreement by July 1. However, there still had not been any announcement on the signing at the time of writing." taken from TheEdge
As of now, there are no official announcement on the handover, except for seeing PETROS signing landmark agreement in gas supply in Sarawak, which could reflect an interesting development behind the wall. However, it will not be a surprise to see Petronas provide an official update on the matter in the later time (official news embargo for 1 to 3 months) as seen before in the contract award for Kasawari CCS project.
Moving forward, the Chemical industry outlook will look set to see an interesting year ahead. As an investor of LCTITAN, I do hope that my investment research will be fruitful.
Referencing material
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IMPORTANT NOTICE
Please be informed that I am not a professional or certified analyst. I am not a licensed consultant, just a normal retail investor. I am just sharing my ideas and opinion on the market outlook. Any company mentioned should not be interpreted as a buy/sell/trade call. Please do your own research and buy/sell/trade at your own risk.
Blog https://targetinvest88.blogspot.com
Telegram https://t.me/targetinvest88
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Discussions
Be the first to like this. Showing 21 of 21 comments
Obviously u don't know lctitan and also Pchem and petrochemical supply and demand.
1 month ago
I am invested in lctitan around rm1.00 before he went to rm 1.40
Now drop back but i am still invested because i believe can go above rm2
1 month ago
KUALA LUMPUR (Aug 19): Petronas Chemicals Group Bhd or PetChem (KL:PCHEM) is projected to face weaker earnings in the second half ending Dec 31, 2024 (2HFY2024), driven by lower average selling prices (ASPs) in the olefins and derivatives segment, as regional shutdowns end and supply increases, according to analysts.
CIMB noted that the company’s 2QFY2024 core earnings were affected by larger-than-expected losses at the Pengerang Integrated Complex (PIC), amounting to RM100 million, compared with a RM10 million loss in 1QFY2024.
1 month ago
Consider to buy LCT at 90 sen and below.
Will start to buy into LCT at 90 sen, all the way to 50 sen and below.
1 month ago
If follow 90% rule, can start to buy in a meaningful amount only at 60 sen. In order not to miss the boat, can start at 90 sen. As long as your cost is less than others, you will have others to be your cushion.
1 month ago
Even if you miss 90 sen buy order, there are still many better buy which offer more value for your money.
1 month ago
Tat is great news.. bad news is good news as long as the future is not going to remain the same.
I invested in m&g at 7 to 8 cents, classify as pn17.. now is 30+ cents
Wad u see is now, wad u didnt see is future
1 month ago
Sslee..
Can tell why Pchem aggressive buying of chemical company in past 4 yrs?
Sarawak side revenue affected?
Lctitan potential target ?
1 month ago
“Growth for the sake of growth is the ideology of the cancer cell.”
Edward Abbey, Writer and environmental activist
1 month ago
Pchem already big investment in Pengerang Integrated Complex so why need another lctitan?
1 month ago
Plant can be modify to produce other in demand chemical, for example energy storage chemical.
Pchem did it for the gebeng kuantan plant, u saw right?
Also can indirectly have ownership on 51% LINE plant at indonesia
1 month ago
the game plan is the same. let lctitan bleed until like 50sen, then suddenly privatised! then relist it 5 years later at super high PE, this time maybe outside malaysia
1 month ago
The last time they did it, the privatize titan, then bought a few other chemical factory and company, then packaged it as a much bigger size chemical factory, only do IPO. So it is not just a delist relist flip. In between got merge in a lot of other factory.. well, it is a rich man game of IPO..
1 month ago
only in an IPO can u can get institutions, uncles, aunties, pakcik, makcik rushing to buy PE 50x stocks!
1 month ago
Yea.. ipo sucker get whack.
But now is not ipo.. now is fell so much until got something exciting to be seen about
1 month ago
if u want to play Lctitan privatisation, safer to play Kps or Fgv privatisation, at least Kps & Fgv making profit, more reason major shareholder to take them private
1 month ago
Yea those 2 are good target.
But petronas issue on Sarawak and Pchem aggressive state of acquisition definitely put this into more excitement.
Ofcourse please do not all in.. only invest what you can afford.
1 month ago
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Obviously u don't know lctitan
1 month ago