¨      Still looking good. NTPM’s1QFY14turnover rose 8.6% y-o-y to MYR124.8m while net profit jumped 17.6% y-o-y to MYR12m. The stronger sales were mainly driven by better showing at its paper and personal care product divisions. Revenue from the tissue paper segment grew 5.3% y-o-y due to higher demand for tissue products in the domestic market, while the higher sales of personal care products (+17.7% y-o-y) were boosted by stronger demand for baby diapers. Similarly, the earnings improvement was bolstered by higher PBT from its paper products (+5% y-o-y) and personal care products (+62.5% y-o-y) segments on the back of more robust toplines. Vis-à-vis 4QFY13, revenue rose 4.3% while net profit fell 6.3% q-o-q. The drop in profit was mainly caused by an unrealised loss on mark-to-market derivatives of around MYR1.3m due to the weakening of MYR against other currencies, namely USD and SGD, compared with an unrealised gain of MYR0.7m in the preceding quarter.

¨      Margin. Both EBIT and PBT margins expanded 0.7ppt y-o-y, largely supported by a stronger PBT margin in the personal care products segment – which was higher at 10.8% y-o-y from 7.8%. This offset a slight decline in PBT margin for paper products (14.3% vs 14.35% y-o-y).

¨      Key risks. The key risks include volatile raw materials prices and weaker demand amid a softening economy. As the results are within our expectations, we are leaving our forecasts unchanged.