PETALING JAYA: About 80% of SumiSaujana Group Bhd’s revenue is derived from the Asia-Pacific and American regions, and the group has given an assurance that business will run as usual despite the ongoing conflict in the Middle East.
Mercury Securities Sdn Bhd said that while shipping disruptions have caused localised logistical delays, Middle East order flow remains intact, as the group views these as timing-based bottlenecks rather than a loss of demand.
“Sustained supply commitments from core customers in Kuwait and Oman support a clear revenue catch-up narrative once logistical channels normalise,“ the research firm said in a report.
SumiSaujaja manufacture specialty chemicals for the oil and gas industry’s upstream, midstream and downstream sectors.
Touching on progress updates, Mercury Securities said SumiSaujana is aggressively executing its capacity expansion, with several key facilities and projects nearing full operational status, such as the Puncak Alam Integrated Complex, a newly acquired warehouse which commenced utilisation in the third quarter of FY25.
The research firm noted that full renovation of the corporate office and warehouse is on track for completion and occupancy by early next month.
On Pengerang, Mercury Securities said operations for the three-year specialised supply contract with Pengerang Refining Company Sdn Bhd are scheduled to begin in April-May. The contract involves the supply of Di-tert-butyl Polysulfide and Ethyl Mercaptan, along with technical in-situ sulfiding services.
Thirdly, on the China Bio-Polyol MoU, Mercury Securities said under the strategic partnership with CoolisT Group, the supply of speciality additives and the commercialisation of renewable vegetable oil-based biopolyols is targeted to begin in the second quarter of this year.
As for the group’s wet gas sulphuric acid project in Indonesia, Mercury Securities said SumiSaujana is transitioning into a technology partner for the facility in collaboration with PT Kilang Pertamina Internasional, Topsoe A/S and SPCI HELM.
The next phase, under a build-own-operate-transfer model, is expected to kick off in the second quarter.
Lastly, on the North America expansion, Mercury Securities said SumiSaujana is advancing its toll-manufacturing strategy in the US market, leveraging its recently granted USPTO patents for sand agglomeration chemicals to localise production and mitigate shipping overheads by the first half of FY26.
“We raise our FY26 earnings forecast by 21%, mainly reflecting the absence of one-off listing expenses and a steadier forex outlook, as management expects the USD/MYR to remain relatively stable. Our model also assumes a higher effective tax rate of 29% (up from 24%) in line with SumiSaujana guidance, and slightly stronger output growth of 3%, driven by stronger contributions from Asia-Pacific and the Americas.
“These positives are partly offset by lower selling prices and a normalising ringgit, which together trim our topline estimates by about 15%,“ Mercury Securities said.
Mercury Securities cut FY27 earnings outlook by 35%, largely due to lower assumed selling prices and a stronger ringgit, although the impact is partly cushioned by unchanged output growth of 4%.
“We keep our dividend payout assumption at 30% for FY26-FY27, supported by the absence of post-listing costs and a more stable ringgit/USD environment.
“Following these revisions, we derive a new target price of RM0.13 (previously RM0.11), based on FY26 EPS of 0.77 sen and a slightly lower target PER of 17.2x.
This still represents about a 50% discount to the global peer group’s 10-year average. With valuations remaining undemanding (FY26 P/BV below 1.0x), we upgrade the stock to Buy,“ Mercury Securities said.
The research firm said that despite evolving US trade policies and geopolitical volatility in the Middle East, SumiSaujana maintains an optimistic outlook for FY26, supported by resilient global drilling activity and the full recognition of one-off listing expenses in FY25.
The group is aggressively executing its next growth phase by scaling North American toll-manufacturing operations and pursuing strategic collaborations to deepen its Middle East footprint, while simultaneously diversifying into bio-based industrial chemicals via its MPOB-licensed and CoolisT partnerships slated for the second quarter of 2026.
These initiatives are being complemented by an internal cost-rationalisation exercise and the centralisation of operations at the new Puncak Alam facility, which are expected to optimise the group’s cost structure and drive long-term margin expansion, Mercury Securities said.
