Samchem to see better growth in key markets
KUCHING: Samchem Holdings Bhd’s (Samchem) first quarter of the financial year 2017 (1QFY17) came above expectations, driven by its main markets and analysts believe that these key markets will continue to drive Samchem’s growth.
The research arm of MIDF Amanah Investment Bank Bhd (MIDF Research) said Samchem’s 1QFY17 net profit of RM5.01 million was above expectations due to better than expected volume growth in key markets.
Meanwhile, its revenue of RM217.57 million was driven by growth in its three main markets: Malaysia, Vietnam and Indonesia.
Its operating margin also improved to 4.9 per cent in 1QFY17 compared to 4.71 per cent in FY16 while net profit margin was enhanced by 0.15 percentage points (ppt) to 2.3 per cent during the quarter, the research house said.
MIDF Research expected better margins for FY17 compared to FY16 due to higher volume and sales.
“During the quarter, sales for Malaysia grew by 33 per cent while Vietnam and Indonesia increased by 39 per cent.
“The high growth in these key markets are attributed to the group’s market positioning strategies as well as its efforts in strengthening its competitive capabilities.
“For instance, Samchem is one of the only three major petrochemical distributors in Vietnam,” it said.
The research house further pointed out that the company is looking into expanding into Myanmar and Laos in the next three and five years.
“On top of that, it was given the distribution rights by Petronas Chemicals in Singapore, Pakistan, Bangladesh, South India, Sri Lanka and New Zealand.
“These expansion plans should help Samchem grow further in the years to come,” it added.