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Result Update

For QE30/6/2020, BPPLAS's net profit rose 36% q-o-q or 87% y-o-y to RM8.5 million while revenue was mixed- up 3.5% q-o-q but down 7.4% y-o-y to RM80.3 million. 

Operating revenue rose q-o-q due to improved sales demand in 2Q20. A subsidiary of the Group received approval since the beginning of Movement Control Order (MCO), thus able to operate to deliver stronger sales performance because food packaging film, stretch film and customised film products produced by the Group are part of the critically required packaging for Food and other Essential Goods.

The Group recorded a historical high for the unaudited PBT and PAT for the quarter under review of RM11.3 million and RM8.5 million respectively, representing an increase of 36% and 36% compared to unaudited PBT and PAT of RM8.3 million and RM6.2 million respectively in 1Q20. The increase in the unaudited PBT and PAT for the quarter under review were mainly due to better product mix and production efficiencies.

Table: BPPLAS's last 8 quarterly P&L

Graph: BPPLAS's last 26 quarters' P&L

Financial Position

As at 30/6/2020, BPPLAS's financial position is deemed healthy with current ratio and gearing ratio at 4.6 times and 0.2 times. Cash in hand amounted to RM78.8 million or RM0.42 per share.

Valuation

BPPLAS (closed at RM1.40 yesterday) is now trading at a PER of 10 times (based on last 4 quarters' EPS of 14.36 sen). If the cash in hand is deducted from the share price, then BPPLAS's PER will be lowered to 7 times. BPPAS also paid a decent dividend totaling 8 sen last 4 quarters- giving it a dividend yield of 5.7%. Overall, BPPLAS is deemed fairly attractive.

Technical Analysis

BPPLAS has broken above the Downtrend line, RR at RM1.00 in early May. Its immediate support is at the horizontal line at RM1.35 while immediate resistance is at the horizontal line at RM1.60.

Chart: BPPLAS's mweekly chart as at Aug 11, 2020 (Source: Malaysiastock.biz)  

Conclusion

Based on good financial performance & position, attractive valuation and bullish technical outlook, BPPLAS could be a good stock for long-term investment.

Note:

I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

http://nexttrade.blogspot.com/2020/08/bpplas-earnings-rose-sharply.html
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