4Q19 PATAMI jumped to RM188m mainly on higher associate income driven by one-off gain from partial disposal of LCUSA’s equity interest amounted to RM140m. Excluding this, core earnings growth was rather minimal at 7% yoy to RM96m
of course Pchem wun bankrup....but is current price expensive. I think yes. Is Rm7 expensive, hell yes. Indeed fertiliser demand was up during the last Q as reported but could it due to the sudden rise of CPO so that Plantation suddenly have more money to buy more? Now this CPO price has came down. Also many said that the next cash crops is durian and there is massive planting of durian so it leads to more demand in fertiliser. But with the covid, durian literally get frozen. Will this also cut the fertiliser demand? On the other product such as plastic, many countries banning single-use plastic & more countries going toward zero fossil fuel vehicle and this will lead to low crude oil......hmm.....seems like not 1 headwind but multiple headwind. Even if it brace through the covid, many challenges ahead.
Hi Titan, petrochemical business is not only "plastics". Pchem Produces olefins, derivatives, aromatics and many base materials used in many markets. This is a super compound which is sold to many producers to make many products which currently cannot be replaced with green materials due to price considerations.
Home furnishing Olefin can be used by itself or in blends for indoor and outdoor carpets, carpet tiles, and carpet backing. The fiber can also be used in upholstery, draperies, wall coverings, slipcovers, and floor coverings.
Automotive Olefin can be used for interior fabrics, sun visors, arm rests, door and side panels, trunks, parcel shelves, and resin replacement as binder fibers.
Industrial In an industrial setting, olefin creates carpets; ropes, geo-textiles that are in contact with the soil, filter fabrics, bagging, concrete reinforcement, and heat-sealable paper (e.g. tea- and coffee-bags). Adhesives and sealants Construction chemicals Corrosion control chemicals
Cosmetics and drugs (With their purchase of da Vinci) Cosmetics raw materials Electronic chemicals and materials Flavourings, fragrances, food additives Pharmaceutical drugs Specialty and industrial chemicals( Specialty and industrial gases Inks, dyes and printing supplies Packaging, bottles, and containers Paint, coatings, and resins Polymer additives Specialty and life sciences chemicals Surfactants and cleaning agents
There are so many applications out there, if people stopped using plastic bags, the last people to worry about is PCHEM.
Now maybe you should read up on the isonanol plant being constructed in pangerang by Pchem. The only one of its kind in that size in this region.
No prizes if you can guess what is the application of isonanol.
all i can see if world demand from petrochemical is getting lesser as there is either direct ban or reduce in usage or there is alternative to petrochemical. Pchem new venture into lubricant also will face challenge because if the world incline towards more electric vehicle, less demand for lubricant compare to combustion engine. Also, the world is over supply. Despite china is shutting down now and might create a short term decrease in supply but if once covid over, i believe china will ramp up production and within 1 or 2 quarters, the supply will flood the market.
no idea what is isonanol use for. Simple google and again it leads to plasticity....i guess plastic again. If Pchem can manufacture large amount of alchohol, then it is very much needed now. Saw video clips of china spraying the street with disinfectant. I guess it must have contained some alchohol..... sorry, i'm just a noob but i never go againt the market. So i better dun invest in thing i don't know la.......
& now i learn something today from icon above comment
been keeping an eye on this stock, entered a bit two days ago and did not sell during rebound, now carrying unrealized loss already. by the way i did know what I am buying into, so don't bash me.
low oil price with low petrochemical price is bad for PCHEM,having said that most petrochemicals price looking to stabilize in Q1 2020; not to mention there are somesizeable one-off expenses in this quarter.Lets see the impact of COVID19 virus in next 2 quarters first before adding more,if the price drop to IPO price i dont mind adding more first before next 2 quarters results! That's fun to be able to buy at IPO price after 9 years~
PCHEM's Net Cash generated from operations this QR is still very good compared to last year. (5,544M vs 6,667M) 5 years ago, it was just 4,699M. I agree that when PIC commences, surely there would be more growth.
PCHEM still has hoards of cash of 12,045M this quarter against 12,329M last year. If I'm x mistaken, PCHEM has one of the largest cash piles in entire Bursa. 12B cash against 457M USD non-current borrowings should be pretty comfortable.
I read that "compressed margins" is the killer of high profits PCHEM had enjoyed in recent years. I hope this would be a one-off event when PIC commences & the damn coronavirus subsides.
With PCHEM's worst quarterly profit since IPO, further aggravated by political instability, investors' confidence in Bursa & PCHEM will dampen. May the price stabilise soon to ease our fears of losing more money. I hope I can hold it for the long term like Philip ( Icarus).
It's ironic that holding on & doing nothing is the most difficult thing to do in challenging times.
Why hold so much cash rm 12b ?, it is a waste mah, if u cash hoard, the return is very low mah....!!
Do not be confuse loh...there is rm 12b cash but number of share is 8b units so your cash per share about rm 1.5. This figure or % cash may not even beat insas loh....!!
Don't worry, if PCHEM goes down I will just buy more.
I won't curse your mother and fxxk your father.
It is a rock solid company with 10 billion cash.
It was cheap when I bought it last year at 8.15.
It is cheaper now when I paid 6.30 for it.
When it hits 5? Even more discount for me to collect more.
People give you discount and dividend, you think viruses and oversupply last forever?
If course buy more sell high.
Unlike fake engineer/banker icon8888 gamble on insas warrants and buy with one hand on the wheel the other on phone buying lctitan at 4.15( buy high) then sell of at rm2( sell low).
You should try doing it the opposite way once in a while.
Then you wouldn't have to be so bitter about life.
Your fixed factors: Free cash flow generation capability. Your production capability. Your location, supply and logistics. Your bottom line pricing and your competitive margins. Your ability to meet capital requirements. Competitors and their ability to outsell/outprice you.
The variable factors: Quarterly demands/market supply. Wars, diseases, lawsuits. Share price expectations from Mr. Market.
In the end the important thing to realize is this.
You have a company with 38 billion in total assets, 8 billion in liabilities. Of which you have 12 billion in cash, and 1.8 billion in borrowings. It has never diluted shares, and maintains a 50 payout.
At today's prices you are buying a business that is valued at 43 billion, has 10 billion in cash, and 30 billion in cash, still doing 16 billion in revenue a year and profitable every quarter despite trade wars, viruses and market oversupply.
What more of a litmus test do you want to prove pchem is a wonderful business worth buying, holding and adding more? The only way to end pchem competitive advantage is to drop a bomb on Malaysia. Even then it might not work.
>>>>>>>>>
enigmatic ¯\_(ツ)_/¯ PCHEM's Net Cash generated from operations this QR is still very good compared to last year. (5,544M vs 6,667M) 5 years ago, it was just 4,699M. I agree that when PIC commences, surely there would be more growth.
PCHEM still has hoards of cash of 12,045M this quarter against 12,329M last year. If I'm x mistaken, PCHEM has one of the largest cash piles in entire Bursa. 12B cash against 457M USD non-current borrowings should be pretty comfortable.
You go back to school and do your maths. Go and calculate back how much it costs to build pangerang then ask yourself if 3 billion USD in cash is a lot or very little.
Of course to those who never made a million, it sure seems like a big number.
Maybe if you stop throwing money into things like insas warrants your rm5k can actually amount to something in the long run.
>>>>>>>
stockraider Why Pchem dividend cut to only 7 sen leh ??
Why hold so much cash rm 12b ?, it is a waste mah, if u cash hoard, the return is very low mah....!!
Do not be confuse loh...there is rm 12b cash but number of share is 8b units so your cash per share about rm 1.5. This figure or % cash may not even beat insas loh....!! 28/02/2020 6:50 PM
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
Outliar
302 posts
Posted by Outliar > 2020-02-26 22:10 | Report Abuse
Interestingly LCTitan had better results this quarter than PChem