Broker: SAC Capital
Date of Report: 8 April 2026

Excerpt from SAC Capital report.

Report Summary

• Stock: MegaChem Limited (MGCM SP)
• Call to Action: HOLD (Maintained)
• Target Price: S\$0.45 (Revised down from S\$0.50)
• Key Highlights:
  • FY2025 revenue declined 3.4% YoY to S\$124.4m, but gross profit improved 1.8% YoY to S\$31.8m. Gross margin rose to 25.6%.
  • Net profit fell 50.6% YoY to S\$3.9m, mainly due to absence of prior year’s insurance compensation. After adjusting for the fire incident, net profit would have increased 31.1% YoY.
  • Dividend: Proposed final dividend of 1.0 Singapore cent per share (35% payout ratio).
  • New warehouse to bring 60%-80% storage in-house, expected to enhance cost control and supply chain resilience.
  • Resilient operations and supply chain: Less than 10% of revenue from Middle East; diversified supply sources allow pivot to North Asia amid regional disruptions.
  • Surface Technology division (27% of group revenue) is well-positioned to benefit from AI and data centre boom.
  • FY26 net profit forecast revised down by 24% to S\$4.7m due to lower revenue forecast (S\$128.1m vs previous S\$142.0m).
  • Valuation: Target price derived by applying a 40% discount to peer mean forward PER of 21.9x.
  • Risks: Macroeconomic/geopolitical headwinds, chemical price volatility, regulatory/environmental risks.

Above is an excerpt from a report by SAC Capital. Clients of SAC Capital can be the first to access the full report from the SAC Capital website : https://www.saccapital.com.sg