(SCI MK/HOLD/RM7.25/Target: RM7.00)

Scientex’s 2QFY17 results were within our expectations. Strong contribution from property arm mitigated the lacklustre performance at its manufacturing arm, which we attribute to tepid performance from industrial packaging, penetrative pricing strategy and operating loss from BOPP plant. Against the backdrop of intensifying competition in the plastic packaging sector, we conservatively cut our FY17-19F earnings by 2-7%. Maintain HOLD. Target price: RM7.00. Entry price: RM6.50.

Source: UOB Kay Hian Research - 23 Mar 2017