Results Note � Petronas Chemical (BUY,
upgrade)
- Weak 2H already priced in
PCHEM saw a weaker 2Q17 whereby revenue of RM3.9bn
and core net profit of RM964m declined 15.7% and 25.6% qoq respectively. EBITDA
margin also contracted by 2.7ppt. Results was nevertheless within
expectations as product prices weakened and coupled with lower plant
utilisation. While we expect further earnings weakness in 2H17, we think that
this is already reflected in the stock price. Despite the softer 2H17, we
expect PCHEM to register 14% tot EPS growth in 2017. Hence, we upgrade the
stock to a BUY and a higher TP of RM8.00.
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