Sumisaujana Group Berhad - Specialty Chemicals for a Sustainable Future
Fri, 21-Mar-2025 07:26 am
by Team Coverage • Apex Research

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SUMI (0349)

Target Price (RM)

0.280

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Executive Summary

  • SUMISAUJANA engages in manufacturing of O&G specialty chemicals, trading of O&G specialty and industrial chemicals, as well as provision of technical related support services and commands a 0.14% market share in Malaysia’s chemicals and chemical products industry, based on revenue of RM156.4m recorded in FY23. 

  • Enhanced productivity and efficiency through the acquisition of the new Puncak Alam warehouse and corporate office, alongside the establishment of a new R&D laboratory will be supportive towards business growth and innovation.

  • We recommend subscribe to SUMISAUJANA’s IPO with a target price of RM0.28 (21.0% total potential upside from IPO price) based on P/E multiple of 15.0x pegged to FY26F core EPS of 1.9 sen.

 

Key Investment Highlights

Established player in the O&G specialty chemicals market. SUMISAUJANA has established a strong presence in Malaysia’s O&G specialty chemicals industry, commanding a 0.14% market share in Malaysia’s chemicals and chemical products industry, based on revenue of RM156.4m recorded in FY23. The Group serves a diverse global customer base, with 81.8% of total revenue in FY24 derived from international markets, including Thailand and Indonesia.

 

Expansion of operational and R&D capabilities. The Group is enhancing productivity through the acquisition of the new Puncak Alam warehouse and corporate office, alongside the establishment of a new R&D laboratory. These developments, which are set to be completed within 12 to 36 months post-listing respectively, will improve efficiency, expedite decision making, streamline operations, and drive innovation in O&G specialty chemicals.

 

Positive sector outlook. The O&G specialty chemicals industry is set for expansion, driven by increased investments in Malaysia’s O&G sector, including PETRONAS’ RM113.0bn domestic capital allocation (2023-2027). Additionally, the implementation of the Chemical Industry Roadmap 2030 (CIR 2030) will drive demand for higher-value products such as specialty chemicals, further strengthening industry growth.

 

Valuation & Recommendation. We recommend subscribe to SUMISAUJANA’s IPO with a target price of RM0.28 (21.0% total potential upside from the IPO price) by pegging FY26F core EPS of 1.9 sen to P/E multiple of 15.0x. The assigned P/E represents a c.17.0% discount to selected peers average in manufacturing and/or blending of O&G specialty chemicals market in Malaysia. This discount is justified by SUMISAUJANA’s smaller scale of business relative to selected peers.

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