CIMB Equities Research reiterated its Outperform call on Daibochi Plastic and Packaging Bhd.
It said on Thursday, July 29 that factors that could catalyse the stock include i) margin expansion over the next few quarters, ii) contracts from major non-F&B companies and, iii) attractive dividend yields of around 7%.
CIMB Research said Daibochi's 1H10 results met its and market expectations. Although annualised 1H10 core net profit worked out to only 80% of its forecast, it considered it to be in line as 2H should be a stronger half.
The 2.5 sen interim tax-exempt DPS took YTD DPS to 6.0 sen, within market and its expectations.
“We maintain our earnings forecasts and RM4.60 target price, which we continue to base on 12x CY11 P/E, a 20% discount to our 15x target P/E for the market.
“Daibochi's medium-term prospects look promising given the positive initial feedback on its anti-static packaging for electronic products which was finally certified last month,” it said.
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