Friday 29 Mar 2024
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KUALA LUMPUR (Feb 28): Petronas Chemicals Group Bhd’s (PetChem) stock rose 65 sen or 7% to a high of RM9.94 on Monday morning (Feb 28) in active trade following record results of RM7.35 billion for the financial year ended Dec 31, 2021 (FY21). Additionally, oil prices continued on their upward trend with Brent crude prices up 4.5% to cross US$102 (about RM428.20) a barrel in the morning. 

The stock had pared some gains to RM9.73 at the time of writing, with over two million shares traded. At RM9.73, it was 4.52% higher than its close at RM9.29 last Friday.

Last week, PetChem announced that it closed FY21 with a record high annual profit of RM7.35 billion, driven by a surge in petrochemical prices throughout the year and healthy demand. Its fourth-quarter (4QFY21) earnings surged over four times to RM2.06 billion — also its highest quarterly net profit on record — from the RM466 million it made for the same quarter of the prior year.

The company also announced a dividend of 23 sen per share, bringing its full-year dividends to 56 sen per share.

Following the record results, analysts raised their target prices (TPs) for the stock. 

CGS-CIMB Research raised its TP to RM10.76 from RM9.97, keeping its “add” call. 

Kenanga Research, on the other hand, upgraded PetChem to "outperform", pegging a higher TP of RM11 from RM8.75. The research house also raised its FY22 earnings forecast by 60% to account for higher average selling price assumptions. 

“Based on our study, PetChem has the highest stock price correlation to Brent crude oil prices. If anything, given the recent strong rally in oil prices, we believe PetChem can serve as a trading proxy for investors looking for exposure to oil prices within the sector,” noted Kenanga in a report last Friday.

Edited BySurin Murugiah
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