TMK Chemical Bhd (TMK) specialises in total chemical management, including sourcing, processing and distributing inorganic chemicals such as acids, alkalis, salts and chlor-alkali derivatives. The Group also provides chemical terminal services, including bulk storage and logistics, through facilities in Malaysia, Singapore and Vietnam, as well as liquid bulk terminals in Malaysia. In May 2024, TMK began manufacturing chlor-alkali derivatives (e.g. sodium hydroxide, chlorine and hydrochloric acid) at its Banting Plant 1, with an annual capacity of 37,000 ECU. TMK serves a diverse industrial customer base, offering value-added services like custom chemical processing, quality control and logistics through its in-house fleet and third-party partners to support delivery and storage needs.
TMK plans to double chlor-alkali production capacity with Banting Plant 2 by 2026 and expand its chemical management facilities in Malaysia and Singapore by 1QFY27. Besides that, the Group aims to grow through acquisitions, targeting synergies and regional presence in Asia Pacific. Moreover, TMK will enhance product offerings, including hydrogen peroxide and poly aluminium chloride, and expand chemical terminal services. In addition, its regional expansion includes facility upgrades in Vietnam and potential entry into Indonesia via acquisitions or new establishments. We derive a fair value of RM2.05 based on a 15.5x PE multiple to its FY25F EPS of 13.4sen. The IPO is expected to raise approximately RM385.0m from the issuance of 220.0m new shares. Besides utilising 12.9% proceeds to construct a new facility in Singapore, 25.7% and 23.4% of the proceeds are allocated for potential acquisition and expansion of its Banting Plant 1, respectively.
Source: PublicInvest Research - 29 Nov 2024