PETALING JAYA: Ancom Nylex Bhd
’s earnings momentum is expected to continue for financial year 2026 (FY26) and FY27 after posting a 52% year-on-year (y-o-y) surge in net profit in the first quarter ended Aug 31 (1Q26).
For 1Q26, the group reported a 52% y-o-y surge in net profit to RM20.1mil, even as revenue fell 13.2% to RM447.4mil.
Kenanga Research said Ancom’s earnings are set to grow again over FY26 to FY27, underpinned by various factors like stronger monosodium methanearsonate (MSMA) herbicide exports, stable timber preservative sales, newer active ingredients (AIs), industrial chemical streamlining and lower freight rates.
“Sales to the United States and Brazil have been growing as the company gains market share due to disruptions faced by its main rival in MSMA, which operates out of Israel,” the research house added.
Come FY27, it noted that the use of MSMA in Brazil beyond sugarcane should start broadening into soybean, as the product is now awaiting the final of three Brazilian regulatory consents.
“Thanks to a three-year supply contract with a long-standing US buyer as well as being a niche player with limited competition internationally, timber preservative exports are expected to remain firm over FY26 to FY27 as the current US contract runs till June 2027.
“Ancom is also working on new markets and sales contracts.”
On its AIs, more recently, AI “T” was launched in April, followed by successful customer audits, hence orders are expected to start trickling in later in FY26 but at a lower average selling price than earlier expected. Another new AI “S” is under development with possible commercialisation in FY27.
“Looking ahead, FY26 to FY27 earnings are expected to perform much better than a particularly weak FY25 on new products and better cost including lower freight rates.
“However, we tone down FY26 core earnings per share (EPS) by 5% to 8.2 sen on higher-than-expected effective tax rates, but FY27 EPS is kept unchanged, along with our target price of RM1.20 per share and “outperform” call.”
Hong Leong Investment Bank Research said it remains positive on Ancom’s FY26 earnings trajectory, supported by the commercialisation of chemical “T” and a gradual recovery in export demand.
The research house maintained its forecasts and “buy” rating on the stock with an unchanged target price of RM1.13, pegged to 15 times the price earnings multiple on core EPS of 7.5 sen.
