KUALA LUMPUR (May 11): SLP Resources Bhd climbed as much as four sen or 4% after the plastic packaging manufacturer reported higher first quarter profit from a year earlier. Investors have also taken into account, the manufacturer's cost cut and revenue growth plans.

SLP (fundamental: 2.8 ; valuation: 1.7) rose to its highest so far today at RM1.09, before paring gains.

At 3:16pm, SLP traded at RM1.06 with 770,400 shares done. Earlier, SLP reported net profit had risen to RM4.46 million in the first quarter ended March 31, 2015 (1QFY15), from RM2.53 million a year earlier.

Revenue however fell to RM41.43 million, from RM44.45 million.

In an interview with The Edge Financial Daily published today, SLP group managing director Kelvin Khaw Seang Chuan said the group’s decision to automate ts production lines would boost its production capacity.

SLP's production capacity will increase from 1,700 tonnes a month to about 2,000 tonnes by August this year. Khaw said higher capacity was expected to help the company turn in "double-digit percentage growth" in its FY15 topline.

At the same time, automation will also help the company reduce dependence on manual labour, hence lower staff cost, according to him.

He also said SLP expected to see a 10% to 12% reduction in raw material cost in FY15, on lower crude oil prices.

Plastic is a by-product of crude oil.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)