PETALING JAYA: Ancom Nylex Bhd
’s industrial chemicals segment is experiencing a Brent-driven uplift, which is likely to moderate from the second quarter of the financial year 2027 (2Q27) should crude oil prices ease amid any de-escalation in the Iran war, says Hong Leong Investment Bank (HLIB) Research.
In its 4Q ended May 31, 2026, the company saw its core net profit rise quarter-on-quarter by 12.5% to RM25.9mil and its revenue increase by 36.5% to RM608.88mil.
The research house said Ancom Nylex’s strong performance was driven by significant growth in the industrial chemicals segment of 82.5%, underpinned by higher average selling prices following the rise in Brent oil prices, in addition to a modest 5.5% improvement in its logistics segment.
“This was partly offset by weaker agrichem revenue (minus 18.4%), mainly due to a weaker US dollar versus ringgit.”
HLIB Research said the company’s core net profit of RM86.8mil for the financial year 2026 (FY26) fell within its but above consensus estimates at 101% and 106% of full-year forecast, respectively.
Meanwhile, it highlighted that MSMA (monosodium methanearsonate) orders for Brazil’s soybean market have started materialising following its label approval in March 2026, albeit with modest volumes as marketing and roadshow activities are still in their early stages.
On top of its current annual sales of around 11 million litres, the research house said the group is targeting an additional 2.5 million to five million litres annually from Brazil over the next three to five years.
Furthermore, the Johor e-ART project, in which Ancom Nylex has a stake, offers long-term recurring income through equity participation, management fees and operations and maintenance services under a proposed 20 to 30 year concession.
“Nevertheless, we do not expect the project to contribute meaningfully to earnings in the near term, given the expected one to 1.5 year negotiation period, followed by a construction timeline of at least three years,” it noted.
HLIB Research has maintained its “buy” rating on the stock with a raised target price of RM1.32, from RM1.13 previously, after rolling over its valuation base year to FY27 pegged to a multiple of 15 times the price-to-earnings ratio.
“We like Ancom for its niche as the sole large-scale producer of active ingredients (AI) for herbicides in Asean as AI manufacturing commands high barriers to entry and earnings growth potential driven by its pipeline of new AIs to be rolled out,” it added.
