Analysts See Stronger 2H FY2026 Performance For Petronas Chemicals
KUALA LUMPUR, Aug 20 (Bernama) -- Petronas Chemicals Group Bhd (PCG) is expected to deliver stronger performance in the second half of financial year 2026 (2H FY26), supported by higher plant utilisation following the completion of major turnarounds, analysts said.
The group is also expected to benefit from early signs of average selling price stabilisation and a recovery in urea prices.
Kenanga Investment Bank (IB) Bhd, in a research note, said it expects PCG’s performance to strengthen in 2H FY26 as product prices remain elevated amid the West Asia conflict.
“Overall, significantly stronger product prices have led to stronger product spreads across both the Olefins & Derivatives and Fertilisers & Methanol divisions despite tepid plant utilisation amid plant turnarounds.
“We believe that its FY2026 forecast outlook is priced to perfection and, at this juncture, are not convinced that the chemicals market is on a multi-year structural uptrend,” it said.
Kenanga IB said it expects FY2026 to mark the peak of PCG’s earnings cycle, with earnings likely to decline year-on-year in FY2027.
Kenanga IB maintained its “market perform” call on PCG with a target price (TP) of RM4.24, while Hong Leong Investment Bank Bhd (HLIB) reiterated its “buy” recommendation with a lower TP of RM5.49.
HLIB expects utilisation rates to improve, with minimal turnaround activities at PC Methanol 2 for 60 days and PC Fertiliser Sabah for 10 days in 3Q FY26, while no plant turnarounds are scheduled for 4Q FY26.
“We observed that key product prices have moderated in tandem with the decline in Brent crude prices from their April peaks, but remain well above pre-war levels.
“Encouragingly, recent price movements in July-August suggest early signs of stabilisation. Polyethylene prices rose about 5.0 per cent month-on-month,” it said.
Meanwhile, urea prices have continued to soften to below US$400 per tonne, mainly due to China reopening export quotas for June-August, which added supply to the global market during a seasonally weak demand period in the Northern Hemisphere.
Nevertheless, purchasing activity has begun to recover modestly, and HLIB expects urea prices to rebound towards US$450-US$500 per tonne as demand returns from key buyers in India, Latin America and Europe.
-- BERNAMA