Good morning.
Today, we feature a note on BP Plastics Holding Berhad in our FundTech Radar – 12th March 2019. BPPLAS is one of the largest Polyethylene (PE) Film manufacturers in Asian Region, supplying Cast Stretch and Blown Shrink films, and other PE packaging films and bags. As at 31 December 2018, BPPLAS exports about 73% of its products mainly to Asia (60%), Middle East and Europe (13%).
Fundamental Stance
· BPPLAS posted a 42.7% yoy growth in its core PATAMI for FY18E after it recorded two consecutive financial years of negative growth.
· Its FY18E core PATAMI margin rose to 6.3% (vs. 4.5% in FY17).
· BPPLAS is in a net cash position of RM51.5m (27.4 sen per share) as at 31 Dec 2018.
· It has been paying dividend consistently since FY05, with div. yield of 3.5%.
· Cost hikes (such as increases in minimum wage, electricity rates and resin prices) will be the key factors that may affect BPPLAS’s performance.
· Strengthening USD against MYR will have a positive impact on its business.
· The ex-date for its third single tier interim dividend of 2 sen per share is fixed on 13 March2019.
· Currently trading at 10.2x 12-month trailing P/E (7.8x if excludes 27.4 sen net cash per share), which is a 38.3% discount to its domestic peers P/E.
Technical Front
Testing the neckline of triangle pattern.
Resistances: 1.15/1.37/1.57
Supports: 1.00/0.86/0.80
The above information is extracted from CIMB Research Report. For the full research reports, outlook and disclaimers, please logon to your account on www.itradecimb.com.my and click on <Research> Tab under Malaysia.
This FundTech Radar report is intended for educational purposes only. It represents a preliminary assessment of the subject company, and does not represent initiation into CIMB's coverage universe. It does not carry investment ratings and CIMB does not commit to regular updates on an ongoing basis.
12th Mar 2019
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