• One of the largest aluminium foil packaging players in Asia pacific. Listed in 1996, Bright Packaging (BRIGHT) is a regional FMCG (fast moving consumer goods) packaging company involved in printing and manufacture of aluminium foil packing materials, packaging boxes and materials, serving the tobacco, liquor, confectionery and pharmaceutical industries.
• Diversified exports markets with reputable clientele. More than 90% of its products are exported to Germany, UAE, Australia, Korea, India, Pakistan, China, Thailand, Indonesia, Singapore, Philippines, Vietnam, Hong Kong and Taiwan. Major clients include Philip Morris and its affiliates, Marlboro, Dunhill, Lucky Strike, Kent, Pall Mall and Benson & Hedges. In the household goods and beverage segments, the group supplies to Johnnie Walker, Chivas Regal and various affiliates of Diageo, Unilever and Procter & Gamble.
• Better outlook for FY2015. According to the Edgedaily on 30 Mar, BRIGHT’s Chairman Datuk Seri Syed Ali Abbas Alhabshee highlighted that the group is eyeing to double its revenue for FY15 to RM68m, driven by diversifying its market shares to other tobacco customers such as British American Tobacco and Japan Tobacco International, and expanding into the Russian market. To recap, on Jan 16, 2015, the company secured a 2-year contract worth US$15m with ZAO Philip Morris Izhora, a Russia-based affiliate of Philip Morris . The Russ ian tobacco manufacturer currently operates Philip Morris ’ second-largest production facility in the world.
• Undemanding valuations with strong netcash per share of RM0.20 (accounted for 43% of share price). We believe the market may have undervalued the stock, as valuation is undemanding at 0.63x P/B (i.e. 48% below industry average of 1.21x and 30% below 10-year average P/B of 0.9x). We think such valuations have provided sufficient margin of safety and cushion further share price decline
• Ripe for a technical rebound. To recap, BRIGHT’s s hare prices tumbled 35% from monthly high of RM0.67 (16 Mar) to a low of RM0.435 on 30 Mar before ending at RM0.47 yesterday. As MACD histogram is rounding up and s low s tochas tic indicator is inching upward, BRIGHT’s s hare prices are likely to stage a reversal and to test the RM0.50 psychological barrier (also 100-d SMA) in the near term.
• A decisive breakout above RM0.50 will spur prices higher towards RM0.525 (20-d SMA) and our LT target of RM0.55 (200-d SMA and 38.2% FR). Key supports are situated at RM0.45 (31 Mar and 1 Apr low) and RM0.435. Cut loss at RM0.43.

Source: Hong Leong Investment Bank Research - 3 Apr 2015