Stock Name: DAIBOCI
Company Name: DAIBOCHI PLASTIC & PACKAGING
Research House: CIMB

KUALA LUMPUR: CIMB Research said investors looking for a cheaper alternative to the small-cap food and beverage (F&B) sector can opt for flexible packaging stocks such as Daibochi and Tomypak which derive some 90% of their revenue from the F&B sector.

'These stocks are trading at only 5 .0 times to 8 times CY11 P/E even though YTD, the share prices of the F&B and packaging stocks in our small-cap coverage have shot up 65% on average compared to 9.6% for the FTSE Bursa Small Cap Index,' it said.

The research house said on Friday, Sept 3 that'' Daibochi and Tomypak also offer attractive gross dividend yields of 5% to 7%. In addition, these two companies pay dividends on a quarterly basis.

'We continue to rate these stocks Buys and maintain our earnings forecasts and target prices of RM4.60 for Daibochi (12.0 times CY11 P/E or a 20% discount to 15 times target market P/E) and RM1.98 for Tomypak (8.4 times CY11 P/E or a 30% discount'' to Daibochi's 12 times target P/E),' it said.