PETALING JAYA: Ancom Nylex Bhd
may see its sales in Brazil increasing, according to Kenanga Research.
The research house said this was anticipated since the company aimed to widen its monosodium methanearsonate (MSMA) herbicide sales in Brazil, beyond sugarcane.
It has already obtained two of the three approvals for this purpose, it noted.
“Ancom Nylex hopes the final consent could be granted in July or August, in time for the pre-planting season when MSMA is applied.
“We have factored in an uptick of 15% year-on-year in the financial year 2026 (FY26) for stronger MSMA sales in Brazil whereas we suspect consensus is taking a more conservative view,” Kenanga Research said.
As an exporter, the research house noted its potentially resilient markets amid tariff threats from the United States.
“Only 33% of the group’s agricultural chemical revenue is from Malaysia.
“The rest of the Asean Region made up 11% and the remaining 56% ended up in key markets such as Brazil and the United States – the two largest herbicide markets in the world,” the research house said.
“Asean is also a major herbicide user, larger than the markets in the European Union or China.
“Ancom Nylex’s current revenue base is not just geographically diversified but it is already present in the world’s key herbicide markets,” it added.
Except for timber preservative, all the other active ingredients (AIs) produced by Ancom Nylex are for herbicide-related AIs. Agriculture is key to the world’s food supply chain.
It is noted that MSMA is an alternative herbicide to paraquat, which is banned in many countries including Brazil, the European Union, China, Thailand, as well as Malaysia.
US exports comprised 11% to 12% of its annual revenue but Kenanga Research noted only 5% was potentially affected.
“Timber preservative exports to the United States, or about 7% of its revenue, are exempted under the reciprocal tariff.
“Only MSMA exports to the United States are affected and the buyers are already seeking exemptions.
“Coupled with easing freight cost, MSMA exports to the United States appeared to be manageable,” the research house said.
Overall, Ancom Nylex expects earnings to recover in FY26 after bottoming out in FY25, it pointed out.
This is in line with Kenanga Research’s expectations. It maintained its “outperform” rating and target price of RM1.20 based on a 13 times forecast FY26 price to earnings ratio (PER).
This is at lower than half the forward PER of much larger regional agriculture chemical peers, according to the research house.
