Journey to Wealth

NTPM Holdings - Foray Into Vietnam

kiasutrader
Publish date: Tue, 20 Nov 2012, 09:14 AM
THE BUZZ  
 Yesterday  NTPM's  wholly-owned  subsidiary,  NTPM  International,  received  an  investment  certificate  from  the  Vietnam  Singapore  Industrial  Park  to  establish  a  subsidiary named NTPM (Vietnam) Co Ltd. 

OUR TAKE  
 Foray  into  Vietnam.  NTPM  Vietnam  will  undertake  business  activities  associated  with  the  manufacture  and  processing  of  tissue  paper  and  its  related  products,  as  well  as  semi-finished paper rolls. This will be accomplished in two stages via: i) the manufacture  of toilet paper and facial tissue from semi-finished paper rolls from 2014 onwards, and ii)  manufacturing  semi-finished  paper  rolls,  toilet  paper,  and  facial  tissue  from  paper  pulp  and recycled paper pulp starting from 2015. 

Establishing a regional footprint. The total investment capital allocated for the venture  is  USD19.1m,  of  which  USD5m  will  be  contributed  by  NTPM  International.  The  outlay  will  be  funded  internally  as  well  as  through  bank  borrowings.  This  which  will  increase  NTPM's gearing  by  approximately  2%.  The  venture  into  Vietnam  is part of the group's  long-term strategy to move into the regional markets. 

Maintain  BUY.  We believe that NTPM's efforts in boosting  sales,  improving  operation  efficiency and expanding regionally will support its future growth.  Maintain BUY, with FV  unchanged at RM0.55, based on 13x FY13 EPS.

Source: OSK
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