KUALA LUMPUR (Jan 6): AffinHwang Capital Research has downgraded Petronas Chemicals Group Bhd (Pchem) to “Hold” at RM5.19 with a lower target price of RM5.30 (from RM5.60) and said that triggered by the sharp fall in oil prices, polymer prices declined by 18-24% in 2H14 and may soften in 2015, further weakening profit margins for Pchem’s gas-based products.

In a note Tuesday, the research house said it expects the net impact to be negative, although higher utilisation and a stronger US dollar should offset the margin squeeze.

“As we now see a higher risk of margin pressure in 2015, we downgrade Pchem to Hold,” it said.