{"id":331399,"date":"2025-02-05T23:23:26","date_gmt":"2025-02-05T15:23:26","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=331399"},"modified":"2025-02-05T23:45:37","modified_gmt":"2025-02-05T15:45:37","slug":"trade-the-news-jgs-shuts-down-struggling-business-jg-summit-olefins-corp","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/trade-the-news-jgs-shuts-down-struggling-business-jg-summit-olefins-corp\/","title":{"rendered":"Trade the News: JGS shuts down struggling business JG Summit Olefins Corp."},"content":{"rendered":"\n
Potential Impact of this News<\/strong><\/td>NEGATIVE on the stock price<\/strong><\/td><\/tr>
Company<\/strong><\/td>JG Summit Holdings<\/td><\/tr>
Stock Code<\/strong><\/td>JGS<\/td><\/tr>
Long-term Recommendation on the Stock<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 32.52<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
<\/div>\n\n\n\n

JG Summit Holdings (JGS) is cutting losses in its struggling petrochemicals business to focus on more profitable ventures while waiting for the industry to recover.<\/p>\n\n\n\n

The group announced that JG Summit Olefins Corp. will be on an \u201cindefinite commercial shutdown\u201d due to \u201cpersisting unfavorable market conditions in the global petrochemical industry.\u201d<\/p>\n\n\n\n

The company, whose roots stretch back to the early 1990s, operates the country\u2019s only naphtha cracker plant. It produces polyethylene (PE) and polypropylene (PP), which are used in the packaging, automotive, and construction industries.<\/p>\n\n\n\n

Market experts see this as the right move, while recognizing this was a tough call for the Gokongwei Group, which kept the business afloat through billions of pesos in losses amid an oversupply from Chinese producers.<\/p>\n\n\n\n

\u201cIt\u2019s the best decision under the circumstances,\u201d Juan Paolo Colet, managing director at China Bank Capital, told InsiderPH.<\/p>\n\n\n\n

\u201cThe business has long been a heavy drag on the Gokongwei Group. After years of massive losses and no clear prospects for a sustainable turnaround, there was really no other rational choice but an indefinite shutdown. The group can now channel more time and resources to their other businesses,\u201d he added.<\/p>\n\n\n\n

\u201cWe think that this is a good move for JGS given the fact that the segment has been dragging earnings for several years already,\u201d Joey Cipres, research analyst at AP Securities, told InsiderPH.<\/p>\n\n\n\n

Citing their report last Dec. 18, he also pointed to the \u201cpersistent global oversupply of polymers, which continued to drive margins to historic lows.\u201d<\/p>\n\n\n\n

\u201cAdditionally, management projects that global demand for petrochemicals will only catch up to supply near the end of the decade, which leads to our tempered expectations for this segment over the next five years,\u201d he added.<\/p>\n\n\n\n

In a report last Jan. 28, commodities-focused publication Argus Media reported that employees of the petrochemical producer were told of potential layoffs as a result of the shutdown.<\/p>\n\n\n\n

It added that the challenges facing JG Summit Olefins were similar to those of producers in neighboring countries in the region.<\/p>\n\n\n\n

(News Source: Insider PH<\/a>)<\/em><\/p>\n\n\n\n

<\/div>\n\n\n\n

This report is prepared by PinoyInvestor\u2019s partner broker below. Find out more about our partner brokers<\/a> and sign up to avail their complete trading brokerage services.<\/em><\/em><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Take advantage of the price opportunity that might arise when the news hits. Trade the news!<\/p>\n","protected":false},"author":11,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1371],"tags":[],"class_list":["post-331399","post","type-post","status-publish","format-standard","hentry","category-trade-the-news","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33"],"_links":{"self":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts\/331399","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/comments?post=331399"}],"version-history":[{"count":1,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts\/331399\/revisions"}],"predecessor-version":[{"id":331401,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts\/331399\/revisions\/331401"}],"wp:attachment":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/media?parent=331399"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/categories?post=331399"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/tags?post=331399"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}