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Q: Research Analysis - Titan Chemical ( Answered,   0 Comments )
Subject: Research Analysis - Titan Chemical
Category: Business and Money > Finance
Asked by: boy_bb-ga
List Price: $25.00
Posted: 28 Nov 2005 03:07 PST
Expires: 28 Dec 2005 03:07 PST
Question ID: 598447
Anyone has a research report or has done reserch analysis on Titan
Chemical?  I am looking for a credit analysis of the Company.  Thanks!
Subject: Re: Research Analysis - Titan Chemical
Answered By: livioflores-ga on 28 Nov 2005 05:29 PST

08-07-2005: S&P ups Titan Chemicals rating to ?BB?  by Joseph Chin:
"Standard & Poor?s Rating Services has raised Titan Chemical Corp
Bhd?s corporate credit rating to ?BB? from BB- and the outlook is
?The rating upgrade on Titan reflects a significant strengthening of
the company?s balance sheet after its successful initial public offer
in June 2005, with almost all of the proceeds used to reduce debts,?
S&P?s credit analysts Royston Quek said on July 8.
Under its IPO, Titan raise RM801 million and the debt burden is
expected to fall to RM1.70 billion by end-2005, compared with RM2.70
billion at March 31, 2005.
?Titan?s robust cash flows due to strong product demand and prices in
the past year have also helped trim its debt burden,? Quek said.
Titan manufactures a variety of petrochemicals and polymers from its
eight petrochemical plants in Malaysia, with an annual capacity of
about 1.10 million tons of polymer and aromatics products.
This was equivalent to about 48% of Malaysia?s total production
capacity. For the first quarter ended March 31, 2005, Titan recorded
RM1.10 billion in revenues and net income of RM159 million.
?The rating on Titan is supported by its integrated manufacturing
facilities, which provide a competitive advantage as it significantly
reduces its dependence on external suppliers and allow the flexibility
to optimise its product mix depending on market conditions,? Quek
He also said the stable outlook reflected the expectation that Titan
should be able to withstand short-term price volatility because demand
for petrochemical products was expected to remain firm in the near to
medium term.
?However, the rating on Titan is likely to come under pressure if the
company expands its capacity or increases its borrowings,? he added."

According to S&P's its issues are: US$700 mil bank ln due 2011.

At the S&P's "Industry Report Card: South and Southeast Asian
Corporates" you can find the text of the Royston Quek's report, I
reproduce here the Titan's part of it:
"Titan's balance sheet was significantly strengthened after its RM801
million IPO in June 2005, with almost all of the proceeds used to
reduce debts. The company's robust cash flows due to strong polymer
demand and prices in the past year have also aided in debt reduction.
As a result, Titan's debt burden is expected to fall to RM1.7 billion
by year-end 2005, compared with RM2.7 billion as at March 31, 2005.
Operating margin improved to 29% for the first quarter of 2005 from 5%
in 2001, while FFO to total debt improved to 31%, from negative 2%.
Titan sells about one quarter of its total production to China, and
the China renminbi move is expected to have a marginally positive
effect on demand for the company's products. With the limited
additional polymers capacity in the near term, firm polymer prices are
expected to persist for the next two years. Titan's operating cash
flow, however, remains exposed to short-term price volatility of both
polymers and naphtha prices. The company is also subjected to event
and business disruption risks as all production facilities are located
in two sites in close proximity."
To get access to this document go to the S&P's site, click on the
Credit Rating link at the top left menu of the page, then click on the
"Credit Ratings Search" link and go to the Register link, it is free:
or directly to:

After you register a search page will be displayed, search by
organization name and use Titan Chemical for the search query.
At the result page select the only option "Titan Chemicals Corp Bhd"
and then go through the links that appears at the Titan's page for
additional info.

At the Titan's website you can download the "Audited accounts for the
financial year ended 31 December 2004" (PDF file, 1.84MB), the
auditers was Messrs KPMG:

And also, if you like it, the "Audited accounts for the financial year
ended 31 December 2003":

The following press release could be of your interest:

For more Titan's press releases see:

See also:
"Titan Chemical?s IPO ? Biggest this year"

Search strategy:
credit analysis  "titan chemical"
"Titan Chemical"
Then I searched for this company at S&P's site.

I hope that this helps you. Feel free to use the clarification feature
if you need it before rate this answer.


Request for Answer Clarification by boy_bb-ga on 29 Nov 2005 00:56 PST
Hi.  First of all thanks for the answer.  However I am looking for a
research report of the Company instead of just the rating of the bond.
 The links below I have already gone through before posting this
question.  Please advise.  Thanks!

Clarification of Answer by livioflores-ga on 29 Nov 2005 05:21 PST

Regarding their debt what I found at S&P's site is the following:
Issue:   US$700 mil bank ln due 2011  
Maturity Date:  Dec 31, 2011  
Rating:  BB  
Rating Date: Jul 08, 2005  
Enhancers Guarantor: Titan Chemicals Corp Bhd, Guarantor: Titan
Petchem (Malaysia) Sdn Berhad, Guarantor: Titan Petrochemicals
(Malaysia) Sdn Bhd, Guarantor: Titan Polyethylene (Malaysia) Sdn Bhd.
Analyst Name: Royston Quek  
Analyst Phone: (65) 6239-6353 

The above debt is a loan, here is more info about it:
"Titan secures RM2.60b from StanChart:
Titan Chemicals Corp Bhd has secured a US$700 million (RM2.60 billion)
syndicated term loan facility from Standard Chartered Bank Malaysia
Bhd - a benchmark against which future Malaysian offshore project
financing transactions will be measured.
Both parties signed the deal in Kuala Lumpur on Jan 20 for the
facility in two tranches comprising a US$500 million seven-year term
loan and a US$200 million 18-month term loan. Titan has submitted to
Main Board listing proposal to the Securities Commission.
Titan managing director Donald M Condon said it expected the approval
to take two to three months. Titan said the facility would allow for
value-adding capital expenditure and provide for a suitable
debt-equity structure.
Founded in 1988 by Datuk TT Chao, Titan is a joint venture between PNB
Equity Resources Corporation, a subsidiary of Permodalan Nasional Bhd,
and the Chao Group International"
From "News In Brief: 20-01-2005 -":

"Malaysia's Titan unit to sign $700 mln loan:
2005-1-23 18:19:30     
A subsidiary of Malaysian petrochemical firm Titan Chemicals Corp.
Bhd. is taking a 7-year, $700 million loan to refinance existing
loans, sources close to the deal said.
Titan Capital (L) Ltd, which scrapped plans for a bond sale, is
signing the deal on Thursday, the sources said.
Standard Chartered Bank's Malaysian unit is the lead arranger of the
deal. Other lenders include Malaysia's top lender Maybank <MBBM.KL>
and third-ranked RHB Bank.
Titan Chemicals, Malaysia's largest producer of olefins and
polyolefins, plans to make an initial share offer this year.
The firm is a venture between government-controlled PNB Equity
Resource Corp. and Taiwan's Chao Group International.
PNB Equity is fully owned by Permodalan Nasional Bhd, Malaysia's
state-run fund manager."
From Asia Chemical Weekly:

Finally I found at Rating Agency Malaysia site a document named
"Malaysian Top 30 Corporates". At this document analysts have reviewed
the business and financial profiles of Malaysia's top 30 companies.
This includes Titan Chemicals. This report is dated on June 2005; see
at page 51 of it for the Titan's profile: (PDF format, 1.28MB)
"Malaysian Top 30 Corporates":

You can also subscribe for free (but limited to only 3 pages per day
view) at ; then search for Titan and select
at the results the link to "Wright Profile: Titan Chemicals Corp
Berhad (Malaysia)" to find more info:

The last two news about this company that I found are:
"22-11-2005: Titan issues profit warning for FY05" By Alfean Hardy:

"23-11-2005: Titan down after profit warning":

I hope that this helps you.

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