PETALING JAYA: Ancom Nylex Bhd
’s margins are expected to stay firm on the back of a positive outlook for monosodium methanearsonate (MSMA) herbicide, expanded agri-chemical portfolio and healthy timber preservative orders in the near term.
For the first half of financial year 2024 (1H24) the producer of agri-chemicals’ core net profit increased by 3% year-on-year (y-o-y) to RM43mil, as stronger agriculture and industrial-chemical profits were offset by higher non-core losses and weak logistics earnings.
Kenanga Research said, while the group’s 1H24 core net profit met market expectations at 46% of the full-year consensus estimate, the figure missed the research house’s expectations at 43% of its full-year forecast.
“The variance against our forecast came mainly from a softer logistics contribution and higher corporate expenses. Its agri-chemicals earnings were lifted by strong orders for higher-margin timber preservatives (which should remain for the rest of FY24).
Ancom Nylex declared a dividend in specie of one share for every 100 held which should reduce its 46 million treasury shares to 36 million shares,” the research house said in a report yesterday.
Kenanga Research maintained an “outperform” call for Ancom Nylex with a target price of RM1.50.
