Small Cap (Malaysia): Luxchem Corporation

Luxchem is a Malaysia based company engaged in the import, export, and distribution of petrochemical and other related products. It operates through two reportable segments namely Trading and Manufacturing. The Trading segment comprises of import, export, and distribution of petrochemical and other related products. The Manufacturing segment engages in manufacturing and trading of unsaturated polyester resin and related products; and manufacturing and trading of latex chemical dispersions, latex processing chemicals, and related products for the latex industry. Geographically, the firm has its presence across the region of Malaysia, Vietnam, Indonesia, Thailand, Singapore, Bangladesh, and Australia.

My personal take – it is not easy to evaluate a chemical specialty company. A lot of variables to consider. I will consider it as a possible trading opportunity.

On an uptrend. Possible target : $1.01 (1st) and $1.275 (2nd) and cut loss at $0.735.

Fundamentally, it is in a net cash position.

Financials generally look ok. Increasing cash position and double digit ROE.

Latest prospect from Management. As mentioned earlier, specialty chemical company is impacted by numerous variables.

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