TMK CHEMICAL BHD (TMK)

Company Profile: TMK Chemical Bhd

TMK Chemical Bhd (Bursa: 5330) is not an ordinary chemical company. It is one of only TWO chlor-alkali producers in Malaysia, commanding an estimated 65% domestic market share in inorganic chemicals. In plain terms: a significant portion of Malaysian industry depends on TMK for essential chemicals such as sodium hydroxide (caustic soda), hydrochloric acid, and industrial salts.

The company was founded in 1989 by Datuk Lee Soon Hian - the youngest brother of the Lee family behind Kuala Lumpur Kepong (KLK), one of Malaysia's largest plantation conglomerates. This family lineage brings two key advantages: an extensive business network and deep expertise in managing chemicals for the plantation industry.

Business Model

TMK operates as a total chemical management provider - meaning they don't merely sell chemicals, but manage the entire supply chain from raw material sourcing, processing, storage, through to delivery for industrial customers. Over 99% of revenue comes from the Chemical Management segment, with less than 1% from Chemical Terminal Services (bulk storage).

TMK's operations span Southeast Asia: Malaysia (primary operations), Vietnam, Singapore, Indonesia, and Brunei. Headquarters are in Petaling Jaya, Selangor.

Key Customers

TMK serves a diverse range of industrial sectors dependent on basic chemicals:

• Palm Oil Industry: Caustic soda for palm oil processing
• Water Treatment: Chemicals for potable water and wastewater treatment
• Manufacturing and General Industry: Acids and alkalis for various industrial processes
• Rare Earth and Nuclear Sector: TMK is identified as a key supplier to Lynas Malaysia (a major rare earth processor)

The IPO Story: December 2024

TMK listed on Bursa Malaysia's Main Market on 12 December 2024 at an IPO price of RM1.75 per share. The listing was met with extraordinary interest - oversubscribed 14.28 times. The company raised approximately RM385 million from the listing.

IPO proceeds were earmarked for:

• Construction of Banting Plant 2 - the primary capacity expansion project
• Debt repayment (approximately RM50 million)
• Working capital and general corporate purposes

Shariah Compliance

TMK Chemical Bhd is a Shariah-compliant stock approved by the Securities Commission Malaysia's Shariah Advisory Council. This means it is eligible for inclusion in Islamic investment portfolios and can be purchased through Islamic investment accounts.

TMK Chemical's Q2 FY2026 quarter (ended 30 June 2026) posted revenue of RM310.39 million (up 17.7% YoY, 28.6% QoQ) and net profit of RM40.81 million (up 91.5% YoY, 35.4% QoQ) - net margin rose to 13.15% versus an average of ~8-9% across FY2025.

For the first half of FY2026 (H1 FY2026), revenue was RM551.76 million (up 5.8% YoY) and net profit RM70.95 million (up 68.6% YoY) - profit growth far outpacing revenue growth, a sign margins are expanding.

TMK Chemical declared an interim dividend of 3.60 sen per share for Q2 FY2026 (announced alongside quarterly results on 26 August 2026) - a payout ratio of roughly 51% based on H1 FY2026 EPS (7.09 sen). The prior dividend was 2.80 sen per share for Q4 FY2025 (announced February 2026); no dividend was declared for Q1 FY2026 or Q3 FY2025.

Trailing 12-month dividends (last 4 quarters) total 6.40 sen per share, giving a trailing dividend yield of roughly 2.08% at the current price of RM3.07. This is far lower than the 9.21% figure mistakenly shown in the April 2026 review - that earlier figure was actually DAYANG ENTERPRISE (an unrelated company) data contaminating TMK's record, not TMK's real dividend figure.