KUALA LUMPUR (Nov 21): Thong Guan Industries Bhd (Thong Guan), one of the region’s largest plastic packaging companies, emerged as Bursa Malaysia’s top ten decliners today after it announced its third quarter financials ended Sep 30, 2014 (3QFY14), yesterday.

As at 2.46 pm, Thong Guan’s share price has shed 10 sen or 4.46% to settle at RM2.14.

Thong Guan saw its net profit more than halved in the quarter under review to RM4.92 million from RM11.06 million a year ago. For the nine-month period (9MFY14), net profit flat was largely flat at RM21.65 million from previous corresponding period’s RM21.85 million.

Revenue for 3QFY14 grew by 1.99% on-year from RM188.12 million to RM191.87 million. For the cumulative period, Thong Guan registered a 5.59% on-year increase in revenue to RM565.61 million from RM535.68 million.

Its earnings per share for the quarter stood at 4.67 sen, a 55% fall from the 10.51 sen registered last year.

RHB Research said Thong Guan’s 3QFY14 results were below its expectations for full-year earnings forecasts.

Despite that, the research house gave the company a "buy" rating with a target price of RM2.60. It said Thong Guan is gearing up for a better 2015, in a note today.

“Since we understand from management that Thong Guan’s sales volume in Oct 2014 has recovered significantly from 3QFY14, we expect better margins from improved operating leverage,” said RHB Research.

It added that earnings momentum would kick in come 2015 due to the company’s capacity expansion in the PVC food wrap division by the end of this year and investments in breakthrough-technology machinery for its stretch film, garbage bags and industrial films divisions.

Insider Asia chose the company as its Stock Pick of the Day on Nov 14, citing the company's attractive valuation at the time.