Prices recovering, maintain forecasts. PCHEM's product margin in Dec 2011 was USD1,034/tonne (+6.5% YoY, -4.8% MoM), we estimate. The year-to-date product margin of USD1,149/tonne was 35.9% higher YoY. Product prices appear to have reached a support level and are slowly drifting upwards, driven by a tight supply/demand balance, higher naphtha cost and some restocking due to low inventory levels. Maintain BUY on PCHEM with an unchanged target price of RM7.50/share based on 13.5x 2012 PER.

Maybank research (11 January 2012)

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