Friday 18 November 2016

BP Plastic (5100) - 不如预期股价暂时往南,扩大产量未来滚滚财源?? - bluefun

今天2016年11月18日,又到了一个星期最期待的一天,也就是 flyyyyyyyyyyyyyyydayyyyyyyyy, kikiki :D

最近的股市都 ding ding dong dong,到现在 bluefun 还在观望中,心中想累积拥有的股份的股价还没达到诱人的水平,所以先看一看呗。 有时候还真的不急,是你的就是你的,该来的总会来,该去的终究会过去, patience to be met and matched , 哈哈哈 XD

Bpplas 终于在今天公布了 FY16Q3的季度业绩,若比起 FY15Q3的季度业绩,只能用“差强人意” 这四个字来形容 ,不过此次季度业绩不佳在我的预料之中。

怎么那么确定说是“差强人意”呢?? 这是因为从 FY15Q3 开始 foreign currency 就开始转强直到 FY15Q4。 所以说FOREX 的优势无形中为  revenue 占了 78% 出口 的 bpplas 带来了利好,也就是所谓的 FOREX GAIN。在 FY15Q3 里, FOREX GAIN 占了 earning after tax 6m 中的的 37%,也就是 2.2m。 FY16Q3 的 FOREX GAIN 才区区0.24m, differences of FOREX GAIN -1.96m。

预料之中是因为 FOREX 的不稳定造成了出口股面对一定的压力, revenue 肯定会比 FY15Q3 好,可是 FOREX gain 就不一定了,可能减少了许多造成 earning after taxation 与 EPS 的滑落。

FY16Q3 Financial Result 

Financial result Highlights - 2016 Q VS 2015 Q comparison - Value

Financial result Highlights - 2016 Q VS 2015 Q comparison - %

1. Revenue 
surged by 11m to 79.4m in FY16Q3 from 68.4m in FY15Q3, +16% thanks to strengthen of foreign currency & higher sales volume from export market.

2. Profit margin 
dropped to 10.82%, the worst profit margin is last 6Q. Mainly due to margin compression arising from higher operating costs driven by higher resin price & minimum wage increased from 1st July 2016.  Rolling 4Q profit margin = 13.14%

3. Net profit 
reduced by 2.91m to 3.05m in FY16Q3 from 5.96m in FY15Q3, - 49% due to : 
(i) higher resin price
(ii) minimum wage
(iii) additional tax expense arising from the reversal of Automation Capital Allowance.

4. EPS 
dropped by 1.55cents to 1.62cents in FY16Q3 from 3.17cents in FY15Q3, -49% due to :
(i) higher resin price
(ii) minimum wage
(iii) additional tax expense arising from the reversal of Automation Capital Allowance.

 Few main reason caused huge dropped in net profit

1. FOREX impact

During FY15Q3 , a realised FOREX GAIN 2.21m due to strengthen  of currency exchange rate such as SGD to MYR while in FY16Q3 company only achieve 0.24m. A big differences about RM1.97m driven to low profit before taxation. In Annual report 2015, net currency exposure RM10.9m denominated by SGD currency. 

While net currency exposure (RM3.9m) denominated by USD, strengthen of USD to MYR will be affected net profit of the company due to rise in resin price lead to more low profit margin.  

Reason: Company exposed to foreign currency risk, a 23% strengthening of USD will be affected 0.668m of net profit while
a 15% strengthening of SGD will acheived an extra 1.234m of the company net profit.

Based on historical average quarterly exchange rate of SGD to MYR,a positive changes in current quarter VS previous quarter will beneficial Bpplastic in realiased gain on FOREX, therefore increasing in net profit. FY16Q2 vs FY16Q1 negative 0.04(2.9859 to 2.9498) caused realised FOREX LOSS 0.76m。

If in FY16Q4, currency exchange rate of SGD to MYR stand above 1: 3.050  ,the company will be achieved about at least 0.5m of FOREX GAIN.

2. Higher Tax Expense

During FY16Q3, the company provided more provision on income tax expense 1.17m due to reversal of Automation Capital Allowances yet to be finalised & gazetted by MOF. 

If we eliminated income tax under provided in prior year 1.17m, the company actually achieved 4.215m of profit after taxation & EPS 2.24cents.

From a accounting perspective, principles of conservatism is always good & better than over reported.  

It might be caused a huge dropped in profit after taxation & EPS that driven to panic sell of the company shareholder, but once the tax incentive finalised & gazetted, company will do a reversal that may bring a positive impact in profit after taxation & EPS in future.

Fundamental Analysis of Bpplas - FY16Q3 Financial Result 

Share price - 18/11/16 - RM1.54

1. ROIC - 0.23 (average 6 years = 0.16)

2. EBIT multiple - 8.21 (average 6 years = 6.43)

3. CY - 7.35% (average 6 years = 4.76%)

4. DP - 67% (average 6 years = 73%)

Threat : 

(a) Low profit margin due to rise in resin price
(b) Volatile of USD to MYR (negative net exposure, purchase of raw material in USD)
(c) weakening domestic market while competition continues to intensify


(a) New PPE 3-metre Cast Stretch Film machine - expansion of additional production capacity 78,000 mt to 88,000 mt.
(b) Higher sales from export market opportunity
(c) Good dividend yield, with current share price RM1.54, forecast dividend each Q 2 cents = 8cents, DY= 5.20%。
(d) No debt


Dropped profit & EPS in recent FYQ3 performance is not a "DOOM DAY". With an expansion, company are able to secure more business opportunities such as export market sales that lead to revenue & earning growth in future. 

Company adapt an good dividend policy. With current share price RM1.54 as at 18/11/2016, with a forecast dividend of 8 cents, dividend yield stand at 5.20% which is an attractive dividend policy compare to its peers and bank fixed deposit interest rate.

Company should put more effort to migrate the hike in resin price to its customer to increase the profit margin that will be impacted profit after taxation & EPS. 

Beside that, company should also manage its production cost to an efficiency level to reduce redundancy expense that will lower the company profit.

It might be a selling pressure for bpplas due to unfavorable financial performance, but in few years in future , bpplas will be a "shining star"  in plastic industry. 

Patience is what i have, Value is what i get.

Threat is an opportunity, opportunity is an investing


P/S: This article is just for sharing purpose, this is not a buy call or sell call, any trade please on your own risks.
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Pitfall of profit 童话故事之盈利的陷阱

朋友们好,好久不见,在哪街角的咖啡店,不知朋友们会不会带着微笑和 bluefun 挥手寒喧呢? 哈哈哈 :D 。 今天咱们就来探讨一下看似保持盈利上扬 (consistent growth in net profit)的公司,为何股价就是吹也吹不涨。 套用 bluefu...