• Total packaging solutions provider with established track record that is underpinned by its manufacturing capabilities of corrugated paper packaging products as well as fast and lean inventory management system.
• We project core earnings to be driven by normalising economy in FY24, as well as the group’s strategies to penetrate the northern region of Peninsular Malaysia within the solar PV and medical devices industries.

• DS Sigma is valued by pegging its FY24f core EPS of 5.0 sen to P/E of 16.0x, leading to a FV of RM0.80.

Company Background

• DS Sigma Holdings bhd (DS Sigma) history traces back to 2002 following the establishment of Kaisung Industries Sdn Bhd (Kaisung) to undertake the supply of plastics and other protective packaging products mainly for customers in consumer electronics industry, with Samsung Electronics (Malaysia) Sdn Bhd (Samsung Electronics) being its first customer. Subsequently, Dai Suwon Packaging Sdn Bhd (DS Packaging) and Dai Suwon Manufacturing Sdn Bhd (DS Manufacturing) were incorporated in 2003 and 2004 respectively. The former focused on the supply of corrugated paper packaging products, while the latter focused on manufacturing.

• In 2006, the group (i) added new machineries such as flexographic printing machine, (ii) commenced of manufacturing of paper pallets, and (iii) commenced of processing for plastic and foam bags where it cut and seal plastics and foam sheets into bags. 2 new customers were secured in 2006, namely Sony Supply Chain Solutions (Malaysia) Sdn Bhd (SSCSM) and Panasonic Appliances Air-Conditioning Malaysia Sdn Bhd (PAACM), while another key customer namely Panasonic AVC Network Kuala Lumpur Malaysia Sdn Bhd (PAVC) was secured in 2010.

• In 2013, the group secured Sony EMCS (Malaysia) Sdn Bhd (SOEM) as another key customer. An additional flexographic printing machine has been purchased to cater to increasing demand. In 2014, DS Sigma purchased Nilai factory and relocate 1 of its corrugated carton printing lines to the factory. The group’s manufacturing operations was relocated to No.29 Klang Factory in 2015.

• DS Sigma acquired additional factory (No.27) next to No.29 Klang site in 2018. Its subsidiary, DS packaging commenced manufacturing of corrugated paper packaging products and purchased its first automatic flatbed die-cutting machine to produce folder-type cartons and trays with complex cuts and in larger quantities. In 2019, DS Packaging purchased its own flexographic printing machine and the group purchased its first automatic folding, stitching, and gluing machine. In 2022, another flexographic printing machine was acquired to replace existing machines.

• DS Sigma, headed by its Managing Director, Lucille Teoh Soo Lien and its Executive Director, Beh Seng Lee who bring with them circa 30 and 29 years of experience in the packaging industry, respectively will be listed on the ACE Market in 2023.

Source: Mplus Research - 21 Dec 2022