NTPM's 1HFY13 results were well within our expectation. Revenue and earnings came  in  stronger  by  7.1%  and  21%  y-o-y  respectively,  largely  buoyed  by  better performance from both the personal care and paper products segments. Stronger baby diapers sales continued to boost the top-line of its personal care segment in tandem with the 'Dragon baby'' boom.  Margin widened on the back of favourable raw material prices and higher average selling prices. Maintain BUY, with a FV ofRM0.55, based on 13x FY13 EPS.
 
Within  expectation.  Revenue  increased  by  7.1%  y-o-y  from  RM233.4m  to  RM217.9m while earnings jumped 21% y-o-y from RM18.6m to RM22.5m. The stellar results were mainly  underpinned  by  stronger  performance  from  the  personal  care  segment.  The increase in revenue was due to higher turnover from personal care products ( +44.3% y-o-y), supported by stronger baby diapersdemand in the domestic market in tandem with the 'Dragon baby' boom. However, tissue products sales moderated slightly by1.6% y-o-y as export sales weakened. PBT expanded by 24.5% on the back of better showing at the personal care (+28.2% y-o-y) and paper products (+23.8% y-o-y) segments. On q-o-q  basis,  NTPM's top-  and  bottom-lines  improved  by  3.1%  and  20.6%  respectively, mainly attributed to higher average selling prices of tissue products as well as favourable pulp and waste paper prices.

Better  EBIT  margin.  EBIT  margin  inched  up  by  2.2%  to  14.3%  due  to  wider  margins from  paper  products  (+3.1%)  as  a  result  of  lower  raw  material  cost  and  higher  selling prices of tissue products. In contrast, margin in the personal care segment was lower by 1% y-o-y.

Setting  foot  on  Vietnam.  The group's recent investment  in  Vietnam  is  one  of  the company's strategies to target the Indochina markets. It has allocated a total investment of US19.1m to set up a 10 ha plant in Vietnam. In addition, the group is also looking to go  into  the  baby  diapers  market  in  Malaysia  in  a  big  way  by  creating  a  wider  range  of products.
 
Maintain  BUY.  We  continue  to  like  the group's regional expansion plan and expect NTPM  to  delivery  satisfactory  results  moving  forward.  Maintain  BUY,  with  a  FV  of RM0.55.

Source: OSK