Petronas Chemicals: Downgrade to Neutral on likely war de-escalation Potential Strait of Hormuz opening warrants valuation de-rating; downgrade to Neutral; TP cut to MYR4.64

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Petronas Chemicals: Downgrade to Neutral on likely war de-escalation Potential Strait of Hormuz opening warrants valuation de-rating; downgrade to Neutral; TP cut to MYR4.64

s thepotentialsaleofARAMCO’s (ARAMCO AB,

unrated) 50% stake in PPC to PCHEM’s parent company PETRONAS (unlisted) following

ARAMCO’s divestment in the refining plant by disposing of its stake to its JV partner, PETRONAS.

We think PETRONAS will make a similar move on ARAMCO’s exit from PPC with PCHEM still Source: LSEG, Nomura

retaining the existing 50% share. While this will likely have neutral impact on PCHEM’s earnings, we

believe the exit of ARAMCO brings more certainty that PCHEM will be able to secure ethylene

Research Analystsfeedstock at favorable discounts to market prices, something that would require ARAMCO’s

agreement initially. Malaysia Oil & Gas/Chemicals

Ahmad Maghfur Usman - NSM

Downgrade to Neutral; TP cut to MYR4.64 (2.7% implied upside) ahmad.maghfurusman@nomura.com

Following our FY27F/28F earnings cuts (by 20-21%) and lower target EV/EBITDA of 6.4x (-1SD vs +603 2027 6892

7.8x prev.) pegged at 50% of FY26F EBITDA and 50% of FY27F EBITDA (vs. FY26F previously),

Research Associateswe downgrade PCHEM to Neutral, with our TP consequently down to MYR4.64 (from MYR5.88),

implying only 2.76% potential upside. The stock currently trades at 5.3x/ 6.6x on its FY26/27F Malaysia Oil & Gas/Chemicals

EV/EBITDA multiples vs historical 5yr average of 7.8x. A key downside risk is lower-than-expected Shashwat Choudhary - NSFSPL

petrochemical product prices, while a key upside risk is prolonged closure of SoH. In materials, we

prefer Press Metal (PMAH MK, Buy).

Year-end 31 Dec FY25 FY26F FY27F FY28F

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