PETALING JAYA: RHB Research expects the discount in Techbond Group Bhd’s valuation to peers regionally will narrow over time.
The research house noted Techbond is trading at 11.2 times financial year 2026 price earnings (PE) multiple, which reflected an excessively steep discount of over 30% to its Asean and global peer averages.
“We value the stock at 14.5 times 2026 PE, due to its niche specialty and integrated business model, solid net cash balance sheet, and export traction.
“The trading discount should narrow over time as the market acknowledges and appreciates its unique position in the adhesives value chain,” the research house noted in its initiation report on Techbond.
According to RHB Research, Techbond’s polymerisation plant in Vietnam offers upstream access to new markets in addition to meeting the group’s raw input needs.
With vertically integrated production, the company also has strict control over product quality and formulation, allowing for improved use and strong customer stickiness.
Techbond’s core adhesive and sealant business growth will be driven by urbanisation, rising consumerism and eCommerce as well as the robust production of electronic items.
“Techbond’s 2023 acquisition of Malayan Adhesives and Chemicals (MAC) – a leading player in industrial adhesives – is earnings accretive and has significantly strengthened its market position, elevating it into a one stop adhesive solutions provider.
“We see operational and product rationalisation at MAC contributing to stronger revenue and profitability ahead, facilitated by cross-selling opportunities and access to new markets,” RHB Research pointed out.
The firm has a “buy” call on Techbond with a target price of 42 sen a share, forecasting a FY26 to FY28 core earnings compounded annual growth rate of 11.2%, driven by double-digit growth of the adhesives segment.
It added Techbond can also benefit from expanding export traction to new markets such as New Zealand and Russia which together offer further earnings upside.
Separately, the group entered into a trio of land acquisitions yesterday in Negri Sembilan’s Eco Business Park VII, signalling long-term expansion plans for its manufacturing and green chemical operations.
The group announced that its subsidiaries Techbond Manufacturing Sdn Bhd and Techbond Greentech Sdn Bhd executed sale and purchase agreements to acquire three adjacent parcels in the SME 3 precint of Eco Business Park VII.
The parcels comprise Lot Nos 3003 and 3004 for a combined RM18.32mil, alongside Lot No 3005 for RM9.43mil, bringing the total commitment to approximately RM27.75mil.