Market Price: Rm1.650
RHB TP: RM2.17； Kenanga TP: RM1.88
Tomypak is one of The Leading Convertor for flexible food packaging materials, sale of packaging materials, polyethylene, poly flims and Sheets. It offers high barrier vaccum metallized laminates for milk powder, beverages, snack food ans so on...It has a similar business model with Daiboci.
NTA per share: Rm 1.05
PE: 14.95
ROE: 10.51
Dividend yield: around 4%
Cap: 180 million
Shares out: 109,340,000units
Strong customers based: Nestle, hupseng, Appollo, Yeo's, anjinomoto, Horlicks......
RHB's Top price: Rm2.17 is based on FY16 PE of 13.5x, in-line with the company's 2 years average historical PE. This also implies 25% discount to its closed peer, Daiboci TP Rm3.80 v trade at a 2years avearge historical PE18.
Techincal view: has strong support at Rm1.60. After klci index few time drop, this share price still standing strong at Rm1.60. Cut loss around Rm1.55
Call buy reasons:
As we know new management team already took position and leading by new Managing director early 2015. New management team's first mission is eliminate and solve the higher operating cost issue since mid-2012 by improvement in efficiency and increase production capacity & greater cost saving. New production machineries with more automation processes and higher output eg. Installed and upgrade its camera inspection machines to detect quality of products (allows the company to cut down on wastage by over 30% on a monthly based.
Lower raw material price come after lower Crude oil is currently around USD55 per barrel. On average, raw material accountant for 70% to 75% of Tomypak's production cost. This directly increasing net profit margin for the company and this reflected by latest first quaterly report 2015 v recorded Rm5.3million ( the best net quarter profit since mid 2015).
Capacity expansion: OCT 2014, company acquired 10.5 acres land in senai, Johor. Allow capacity expansion in 2015 and 2016. Besides, new management team set a target or vision to surpass Daiboci (8125) in next three years.
