PETALING JAYA: Techbond Group Bhd
is set to experience new growth opportunities following the recent acquisition of Malaysian Adhesives and Chemicals (MAC) from PPB Group Bhd.
Kenanga Research in a report yesterday said MAC’s adhesive products are used further upstream, catering to the production of chipboard, particle board and paper carton packaging.
To expand MAC’s market share in the area, adhesive manufacturer Techbond plans to leverage its current client network and market knowledge.
Although its polymerisation plant in Vietnam had recently started producing raw materials for internal consumption, Techbond also targets supplying other gluemakers in areas or niches where the group is still absent, such as China.
Kenanga Research said that its new plant in Vietnam produced polymers that were used as input for adhesive production.
Techbond is able to enjoy strong customer retention despite charging premium pricing for its goods, thanks to its distinctive adhesive combinations and rising efficacy, making it affordable for its clients.
With that, Techbond is looking to offer premium solutions to customers seeking environmentally-friendly adhesives in collaboration with the Malaysian Palm Oil Board.
Kenanga Research has an “outperform” call on Techbond with a target price of 45 sen per share, in line with its international peers’ for its customer-centric manufacturing business module, strong customer base and growing presence in South-East Asia.
For its second quarter ended Dec 31, 2022, Techbond reported a net loss of RM1.68mil, compared with a net profit of RM2.59mil in the previous corresponding period.
Revenue in the quarter grew to RM24.86mil versus RM22.59mil a year earlier.
In its notes on its second quarter earnings, Techbond said, “All in all, the long-term prospects of the group remain intact, premised upon our growth plans and backed by our robust balance sheet.”
