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Author: Tan KW   |   Latest post: Sat, 19 Jan 2019, 03:43 PM

 

COMMENTS ON BOX-PAK (MALAYSIA) BERHAD (6297) - louisesinvesting

Author:   |    Publish date:


Wednesday, January 9, 2019

 
FIGURE 1: BOX-PAK (MALAYSIA) BERHAD LAST 5 YEARS SHARE PRICE TREND

**analysis based on 2017 annual report.
1.       GENERAL INTRO: This counter core business is manufacturing and distribution of paper carton / boxes.
 
2.       NOTABLE POINTS:
a.         main operation at Johor, Selangor and Vietnam, have plans to set up new manufacturing plant at Myanmar.
b.        major shareholder: Kian Joo Can Factory Berhad 55% shares (in turn, another listed company, Can-One is major shareholder of Kian Joo)
c.         losses in 2017 financial year attributed to drop in gross profit, higher finance cost and investment cost on setting up manufacturing plant in Myanmar.
d.        Malaysia corrugated cartons industry is matured market with many players, the trade association has more than 70 members.
e.        sold carton boxes mainly for consumer goods industry, e.g. electronics and electrical, footwear and furniture industry
f.          reliant on paper suppliers to obtain paper rolls for carton box manufacturing, pricing influenced by international market price of paper pulps and old currugated cardboards, as well as fluctuations in foreign currency exchange.
 
3.       IS THIS COUNTER A STRONG GROWTH STOCK? 
a.       REVENUE RANGE (million): ~ 552.7 million in 2017 annual report, this is a medium revenue company.
b.      SHARE PRICE: share price from 2012-2015 constant at around RM2.20, in mid 2016, started a downward trend of share price, dropped from ~RM2.80 to current share price of ~RM1.
c.       EARNING PER SHARE (EPS): earning per share in last 5 years are on decreasing trend, from 19.88 to -14.62 sen per share, reported losses in two recent financial years.
d.      FUTURE POTENTIAL/PROSPECTS: facing challenges, including rising cost of raw materials, in particular, testliners and medium paper, increased ~20% in the 2017 financial year. Also facing competition from other manufacturers, further pressure on profit margin. Due to labour shortage, have reliance on foreign workers from Nepal, Vietnam and Bangladesh
e.      CAPITAL EXPENDITURE (CAPEX): spending on purchase of new fixed assets is 62.7 million, around 10% of total assets, significant spending on new factory set up in Myanmar.
 
4.       IS THIS A STRONG DIVIDEND STOCK?     
a.       DIVIDEND YIELD: in 2017 report, no dividend payout declared
b.      CONSISTENCY: no dividend payout declared since 2015
 
5.       OTHER INDICATORS:
a.       CASH FLOW: cash flow is positive, around 62.5 million
b.      SUPPORT BY INSTITUTIONAL INVESTORS: there is no presence of institutional investors at top 30 major shareholders list
 
Disclaimer: The content of the blog posts are for sharing purpose only. Readers are encouraged to carry out further research and analysis as well as follow up latest update information before making any investment decisions.

 
 

 

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