PETALING JAYA: Agrochemical-based Ancom Nylex Bhd
stands to benefit from Brazil’s environmental agency’s approval on the use of herbicide monosodium methanearsonate (MSMA) for its soybean expansion, says Kenanga Research.
Ancom Nylex, which manufactures and sells herbicides such as MSMA as well as other fungicides and insecticides has a presence in Brazil, the world’s largest soybean producer via its major shareholder Helm AG which has a distribution arm there.
Described by a US Department of Agriculture study as “one of the most competitive agricultural producers and exporters in the world,” Brazil is a large producer (fifth largest by area) with diverse climates to support wide range of crops, from soybean, coffee, sugarcane to orange, tobacco, banana and cassava.
It ranked among the world’s top-five importers of fertiliser and pesticide.
In a note to clients, Kenanga Research said the Brazil and soybean factors meant growth for Ancom Nylex.
“Brazil is the top soybean producer today, producing about the same as the United States and Argentina combined and its soy bean planting is likely to continue growing 3% to 4% a year,” the research house said.
Conab, which is a unit of Brazil’s Agriculture Ministry, expects soybean planting to rise 3% to 49 million ha in 2026 and poised to reach an estimated 57 million ha by 2034, producing about 199 million tonnes of soyabean.
Kenanga Research said it kept its forecasts on Ancom Nylex intact, but raised the stock’s target price to RM1.40 from RM1.20 previously on better growth outlook.
The research house expected the group’s fourth quarter of financial year 2026 (4Q26) to see some orders for the 2026 soy planting season, but meaningful sales are more likely in FY27 as each of the 29 states in Brazil need to individually adopt the latest approved list.
“Overall, core net profits of RM90mil to RM110mil in FY26-FY27 can reach RM140mil to RM150mil by FY30 with RM20mil to RM30mil of the uplift coming from MSMA sales to soybean farmers as appraised by us,” it added.
Kenanga Research continued to like Ancom Nylex for being South-East Asia’s largest herbicide active ingredients producer, hence facing neutral exposure amid the ongoing US-China trade tension and a beneficiary of widening ban on paraquat.
The rising soybean contribution can help investors diversify beyond oil palm while still providing exposure to the relatively defensive global food and fuel exposures.
