This article first appeared in The Edge Financial Daily, on October 9, 2015.
BP Plastics Holding Bhd (-ve)
BP Plastics (Fundamental: 2.5/3, Valuation: 1.4/3) triggered our momentum alert for the second time this week, rising 5.2% to close at a 3-year high of RM1.41 yesterday. One of the largest polyethylene (PE) film manufacturers in Asia, the company supplies stretch films, shrink films, other PE packaging films and bags to 51 countries. Export accounted for some 78% of sales in 2014, with Japan being the biggest market.
For 1H2015, revenue fell 9.4% y-y to RM134.0 million, hurt by weakened domestic demand following the implementation of GST. Net profit, however, grew 22.0% to RM7.8 million, thanks to lower raw material costs.
BP Plastics pays dividends consistently. Dividend totalled 6 sen per share for 2014, giving an above-market yield of 4.5%. Last month, it paid an interim dividend of 3 sen, bringing year-to-date dividends to 5 sen.
As at end-June, the company had net cash of RM51.5 million, or about 20% of its market capitalisation.