KUALA LUMPUR (July 22): Affin Hwang Capital Research has downgraded Petronas Chemicals Group Bhd to “Hold” at RM7.80 with a lower target price of RM8.30 (from RM10.10) and said it does not see near-term catalysts for the stock.

In a note today, the research house said the continued uncertainty over the trade talks between the US and China has taken a toll on petrochemical prices.

“We also slashed our FY21 EPS forecast by 19% mainly to account for weaker long-term PE prices (lower by 25% to US$900/tonne), as a result of rising capacity in China and softer global demand.

“We expect soft 2Q19 earnings, which will likely further weaken in 3Q with a heavy plant turnaround.

“We cut 2019-21E EPS by 18–19% and lower our target price to RM8.30 (from RM10.10),” it said.