Kenanga Research starts coverage on ANCOMNY 4758 ANCOM NYLEX BERHAD, target price RM1.80
KUALA LUMPUR (Jan 19): Kenanga Research has initiated coverage on Ancom Nylex Berhad at RM1.16 with an “Ourperform” rating and target price of RM1.80 based on FY24F PER of 15x, which is at a 30% discount to its larger international peers.
In a note on Thursday (Jan 19), the research house said it likes Ancom Nylex for it being: (i) the largest herbicide active ingredients (AI) producer in South-East Asia, (ii) a beneficiary of the widening ban on the paraquat use, and (iii) a proxy to global food production and food security goal.
“With demand for paraquat replacement likely to increase, Ancom Nylex is completing two new reactors in Shah Alam by Feb 2023.
“In March 2023, another AI production facility at Port Klang is also due to commence, allowing assemble of machines for the synthesis of two new AIs and expected to start contribute in FY24.
“Risks to our call include: (i) downturn in crop production in key markets, (ii) changes in regulation for AI acceptance, and (iii) foreign exchange translation risk,” it said.
http://www.theedgemarkets.com/node/652346
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