|Last Price ||Avg Target Price || Upside/Downside ||Price Call |
|1.49 ||1.37 || -0.12 (8.05%) || |
|* Average Target Price, Price Call and Upside/Downside are derived from Price Targets in the past 6 months.|
|** Price Targets are adjusted for Bonus Issue, Shares Split & Shares Consolidation (where applicable).|
|Date ||Open Price ||Target Price ||Upside/Downside ||Price Call ||Source ||News |
|27/02/2015 ||1.29 ||1.37 ||+0.08 (6.20%) ||HOLD ||CIMB || |
|17/11/2014 ||1.27 ||1.37 ||+0.10 (7.87%) ||HOLD ||CIMB || |
danchong Thanks Icon8888, a very good report
johnny cash From bad to worse
Tomypak’s 2Q14 net profit was a disappointing 38% below our expectations,
with 1H14 net profit accounting for only 23% of our full-year estimate. The
weak 2Q net profit was mainly due to lower domestic sales and higher
operating costs. We cut our FY14-16 EPS forecasts by 32-42%. This lowers our
target price, still based on 7.8x CY15 P/E, a 40% discount to Daibochi’s 2015
13x P/E target. The stock remains a Reduce. Potential de-rating catalysts
include further deterioration in EBITDA margins and declining domestic sales.
For exposure to the sector, we prefer Daibochi.
1H14 net profit down 67% yoy
Although Tomypak’s 1H14 revenue was only down 4.9% yoy, its 1H14 net profit
was down a huge 67%. Interim DPS was only 1 sen, also below our expectation.
YTD, a total of 3 sen DPS has been declared. Other than higher electricity and
labour costs, the company attributed its weak 1H14 results to declining
domestic sales. 1H14 local revenue was RM46.5m, down 20% yoy, which is a
major concern. Although the lower revenue was compensated by higher export
revenue (1H14 +10% yoy), we understand that the profit contribution from
exports has been affected by stiff competition.
Deteriorating profit margins
Since 2Q12 (refer to Figure 2), Tomypak’s EBITDA margin has been falling.
2Q14 EBITDA margin was only 8.4% compared to 18% two years ago. Its peer,
Daibochi (DPP MK, Hold), is managing the current high operating costs
environment much better. Daibochi’s EBITDA margin has been stable at
13-14% over the past few quarters. We believe one of the reasons why Daibochi
is doing better is its stronger quarterly revenue since 3Q13 (refer to Figure 3),
offering it greater economies of scale. Until we see signs of stronger topline
growth for Tomypak, its profit margin is expected to remain under pressure.
Balance sheet remains healthy
As at end-Jun, Tomypak has a net debt of RM18m or 0.2x net gearing. The
company can easily gear up if it needs funds to finance any major capex. It
should not have any problems paying out dividends either.
johnny cash target reduced to 0.70 from 1.17,,,CIMB REPORT TODAY
speakup will Tomypak crash like Zhulian after reporting horrible results?
joerakmo new acting MD has added/created value at another company.Hope he can replicate it here.Takes time though.
michealc coming soon......
danchong The former MD is selling his stake to M/s New Orient Resources Sdn. Bhd. (Company No. 1109740-K). Anyone have any info regarding this new shareholder? Is it good for the company?