TEXT The current downturn in the global economy is having a negative impact on the demand for petrochemical products. In 2H 08 the company witnessed a decline in its sales volumes across all its product lines. Subsequently, declining demand is pushing down the company’s average selling prices. However, SPC believes that the price of some of its petrochemical products have bottomed out and expect prices to at least stabilize in the near future. Even if prices stabilize and begin to improve from current levels, they will remain lower than those of FY 2008. This, together with the weak demand outlook, will weigh heavily on the company’s FY 2009 revenues. Despite these factors, we do expect the company to return to profit in FY 2009 as lower average crude prices will significantly reduce the company’s crude oil purchase costs (113.8% of turnover in FY 2008). Hence, based on our fundamental outlook, we believe SPC’s common stock to be fairly valued at current price levels.Read the full report free of charge with free to view access to institutional-quality research on 400 companies and over 700 stocks at www.researchoracle.com or purchase a pdf of the full report from the Alacra store

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