HEXTAR GLOBAL BERHAD (HEXTAR)

Hextar Global Berhad — From Weedkillers to Frozen Durian

Imagine a company that started by selling herbicides to Malaysian farmers, then expanded into specialty chemicals for rubber glove factories and oil companies, and is now exporting frozen durian to China. That is Hextar Global Berhad — a chemical distribution conglomerate still defining its ultimate identity, yet already managing to build an empire worth RM2.93 billion on Bursa Malaysia.

Listed on the Main Market of Bursa Malaysia under stock code 5151 (HEXTAR), the company is one of the largest agrochemical distributors in Southeast Asia. Its Shariah-Compliant status ✅ makes it a suitable choice for Muslim investors seeking exposure to the chemicals sector.

Three Business Pillars

Hextar Global's business currently rests on three main segments:

1. Agriculture (~42% of H1 2025 revenue) — The original backbone of the company. Hextar distributes herbicides, insecticides, fungicides, and fertilizers to farmers across Southeast Asia. Margins in this segment are relatively thin as the business model is trading (distribution) rather than manufacturing. However, large-scale operations allow the company to negotiate competitive prices with global chemical producers.
2. Specialty Chemicals (~38% of H1 2025 revenue) — This is Hextar's margin engine. It supplies chemicals to the oil & gas industry, rubber glove manufacturers, and other industrial sectors. Long-term supply contracts provide revenue stability, and margins are higher than in the agriculture segment. This is why, even as revenue declined in FY2025, net profit still grew slightly.
3. Fruits/Durian (~20% of H1 2025 revenue) — The youngest and most "exciting" segment from an investor perspective. Through the acquisition of the PHG Group in FY2023, Hextar entered the frozen durian export industry targeting China. The Malaysia-China MoU for fresh durian was signed in April 2024, opening up a larger market opportunity. This business is seasonal, with peaks in the second half of the year (H2).

Exiting Consumer Products — A Smart Strategic Move

Between 2023 and 2024, Hextar Global deliberately divested its consumer products segment. This is a positive development — the company is focusing on its core strengths rather than spreading itself too thin. In Malaysian corporate history, many companies have stumbled by diversifying too aggressively without sufficient operational depth. Hextar chose to focus.

Business Model: Trading, Not Manufacturing

This is the most important thing to understand about Hextar Global: it is a distribution company, not a manufacturer. The company does not make herbicides or fertilizers itself — it buys from producers (mostly global chemical firms), then distributes to end customers across Southeast Asia.

Implications of this model:

• ✅ Asset-light — No need for expensive factories, heavy machinery, or intensive R&D
• ✅ High ROE (~22%) despite very thin book assets
• ⚠️ Thin and volatile margins — NPM ranging from 3.47% to 14.40% across the 8 quarters studied
• ⚠️ NTA per share of only RM0.07 — Almost all "value" is in the network, customer relationships, and contracts — not physical assets

Size and Market Position

Management: Datuk Eddie Ong Choo Meng

The founder and controlling shareholder of Hextar Global is Datuk Eddie Ong Choo Meng, who maintains control through Hextar Holdings (58.01% stake in HEXTAR Global). He built the Hextar group from the ground up and expanded it into a multinational conglomerate.

Recent developments in insider ownership warrant attention — analyzed in depth in the Gold section below.

Credit Rating: RAM AA3 — Then Withdrawn

At one point, RAM Ratings assigned an AA3/Stable/P1 rating for Hextar's proposed Sukuk Wakalah facility worth RM1 billion (MTN) + RM300 million (CP). However, this rating was subsequently withdrawn at the issuer's own request — with no public explanation. This is a point investors should note when assessing the company's credit risk.

Total debt at Hextar Global reached RM421.5 million by end of 2023, rising dramatically from just RM60.1 million in 2020 — a 7-fold increase in just 3 years. This reflects the company's aggressive expansion strategy, including the PHG Group acquisition to enter the durian industry.

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