This article first appeared in The Edge Financial Daily, on September 23, 2015.

BP Plastics Holding Bhd (+ve)

SHARES of Johor-based BP Plastics (Fundamental: 2.5/3, Valuation: 1.4/3) have risen by 69.8% to RM1.18 year to date. The company is seen as a likely beneficiary of falling crude oil prices which will translate into lower cost of raw materials.

For 1HFY2015, revenue declined 9.4% y-o-y to RM134 million, mainly due to lower export sales. Net profit, however, jumped 22.0% to RM7.8 million, boosted by lower raw material costs and forex gains.

BP Plastics manufactures stretch films, shrink films and other polyethylene packaging films and bags.

Export markets accounted for some 78% of sales in FY2014. In June, the company successfully commissioned a new RM13.5 million stretch film machine that will give it additional production capacity.

BP Plastics has a net cash position of RM51.5 million and consistently pays dividends. Dividends year to date totalled 5 sen, which includes a special dividend of 2 sen. This translates into an above-market yield of 4.3%.