HLIB Research said the group’s outlook will be underpinned by the agricultural chemicals segment.
PETALING JAYA: Ancom Nylex Bhd
’s earnings are expected to recover sequentially in the second half of financial year 2026 (2H26), after its recent softer 1H26 results, says Hong Leong Investment Bank (HLIB) Research.
The agrochemical-based group posted a core net profit of RM17.9mil in 2Q26, down 10.6% quarter-on-quarter but rose 63.9% year-on-year, accounting for 44% of the research house’s full-year forecast and 43% of consensus.
HLIB Research said: “While the industrial chemicals segment is expected to remain subdued amid lower average selling prices and margin pressure in a weaker oil price environment, we believe the group’s outlook will be underpinned by the agricultural chemicals segment.”
The research house is also encouraged by Ancom Nylex’s milestone, with the approval of monosodium methanearsonate (MSMA) in Brazil for soybean crop.
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.
Brazil’s soybean planted area of about 45 million ha is approximately five times larger than its sugarcane area of around nine million ha, significantly expanding the addressable market for MSMA, according to HLIB Research.
In FY25, Ancom Nylex sold about two million litres of MSMA into Brazil, primarily for sugarcane applications, and the group is targeting a gradual volume growth of around 20% to 30% over FY26-FY27.
“We believe this development represents a meaningful scalable opportunity for the group’s active ingredient (AI) portfolio going forward,” added the research house.
HLIB Research liked Ancom Nylex for its niche as the sole large scale producer of active ingredients for herbicides in Asean given that manufacturing commands high barriers to entry and earnings growth potential driven by its pipeline of new AIs to be rolled out.
It has maintained a “buy” call on the stock with an unchanged target price at RM1.13 per share.
The shares traded at 92 sen at press time.
