KUALA LUMPUR (Dec 8): Shares of PETRONAS Chemicals Group Bhd (KL:PCHEM) still have more downside as polymer prices weakened further, said an analyst.

PETRONAS Chemicals’ olefins-and-derivatives business has been in the red for the past five quarters, mainly due to weak spreads and operational setbacks, and the losses could deepen as polymer prices continue their downtrend, Maybank Investment Bank (Maybank IB) warned.

“We remain bearish on the petrochemical sector as polymer prices continued to weaken over the last few weeks,” the research house said and kept its ‘sell’ call on PETRONAS Chemicals.

PETRONAS Chemicals has bounced off lows, though the decline since the start of 2025 has erased more than one-third of its market value as the company sank into the red amid an industry downcycle and overcapacity in the region.

A large majority of analysts covering the stock are bearish with 11 ‘sell’, five ‘hold’, and four ‘buy’ calls. The average target price is RM3.24 based on 20 analysts tracked by Bloomberg. The consensus, however, expects the company to return to the black next year.

New regional capacity additions and build-outs in 2025-2028 appear to be still pressuring average selling prices despite capacity curbs in South Korea and efforts to rein in the price war in China, Maybank IB flagged.

“We prefer to minimise exposure to the petrochemical sector as earnings risks still tilt to the downside,” the research house added.