PETALING JAYA: Texchem Resources Bhd
’s polymer engineering division is expected to drive earnings growth, supported by strong demand from semiconductor and memory customers and continued investment in technology and capacity, according to RHB Research.
“Texchem’s core profit rose 100.7% year-on-year (y-o-y) to RM15.6mil in the first nine months of 2026, exceeding expectations at 94% of its full-year forecast, mainly on stronger-than-expected margins in the industrial and polymer engineering divisions,” said RHB Research in a note.
For the nine months, revenue increased 5.5% y-o-y to RM888.7mil, supported by growth across all business segments except the restaurant division.
Stronger-than-expected margins in the industrial and polymer engineering divisions supported earnings growth.
For the third quarter, the polymer engineering division’s revenue rose 21% y-o-y to RM74.8mil, while pre-tax profit increased 56.3% to RM8.2mil, supported by stronger semiconductor and memory demand and favourable foreign-exchange movements.
RHB Research expects demand for automated transport equipment materials, alongside continued investment in technology and capacity, to support further growth in the polymer engineering division.
Meanwhile, the restaurant division’s revenue fell 8.9% y-o-y to RM66.7mil in the third quarter, resulting in a pre-tax loss of RM0.5mil compared with a pre-tax profit of RM2.1mil a year earlier.
The weaker performance reflected cautious consumer spending and stiff competition.
The restaurant division plans to step up promotional activities to drive sales, while placing greater emphasis on kiosks and outlet rationalisation to improve efficiency.
However, RHB Research cautioned that higher costs arising from the minimum wage increase could pressure margins, particularly in the restaurant segment.
RHB Research maintained its “buy” recommendation on Texchem and raised its target price to RM1.58 from RM1.39.
