RHB lowers Petronas Chemicals to market perform
KUALA LUMPUR, May 30 — RHB Research cut its call on Malaysia's Petronas Chemicals Group Bhd to market perform on the shaky outlook for the company's products amid current global economic uncertainties.
"There is downside risk in the 2Q and possibly 3Q FY12 as demand and product prices will likely be influenced by the continued uncertainty in the Eurozone and the economic slowdown in China," RHB said in a research note on Wednesday.
RHB cut earnings per share forecasts for Petronas Chemicals for the financial years 2012, 2013 and 2014 by 1.5 per cent, 3.5 per cent and 5.4 per cent respectively due to the uncertain outlook for the olefins and derivatives (O&D), and fertilisers and methanol (F&M) segments.
"Earnings will remain volatile in the medium term, with potential for more downside - influenced largely by softening oil prices and weakening fundamental demand for petrochemical products," RHB added.
Petronas released its 1QFY12 results on Monday, showing a 7.7 per cent drop in net profit to 1.121 billion ringgit due to higher tax expenses.
RHB lowered its fair value estimate for the stock to 6.84 ringgit per share from 7.44 ringgit per share. — Reuters
