Friday 29 Mar 2024
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KUALA LUMPUR (April 11): Public Investment Bank Research has initiated coverage on Halex Holdings Bhd at 95 sen with an “Outperform’ rating and target price of 95 sen and said parallels between Halex and Hextar Chemicals Sdn Bhd go beyond just being in the same business space, their marriage just recently consummated with minority shareholders of the former agreeing to the acquisition of the latter via a part-cash mostly-share deal valued at just under RM600 million.

In a note today, the research house said the combined capabilities of Halex and Hextar Chemicals will see the Group dominating ~30% of the domestic market space, its closest local competitor some 2.6x smaller.

“With the Group targeting to grow its market share to 40% in the next 3 to 4 years via organic means and mergers/acquisitions, and an estimated agrochemical market space of about RM800 million domestically and RM2.1 billion in Indonesia, scope for growth is still ample.

“We initiate coverage with an Outperform call and a PE-derived target price of 95 sen (16x FY20 EPS),” it said.

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