Wednesday, August 22, 2012

Boxpak- a proxy to the consumer theme play


Box-pak (Malaysia) Bhd ('Boxpak') is involved in the manufacturing and sales of quality Corrugated Carton Boxes, Die-cut Trays, Wraparound Cartons, Point of Purchase (POP), and Paper Palette for use in the packaging industry. Boxpak operates in Malaysia and Vietnam.

Recent Financial Results

Boxpak is a profitable company which enjoyed a steady top-line growth albeit flattish bottom-line. For QE30/6/2012, Boxpak;s net profit increased by 50% q-o-q or 37% y-o-y to RM5.3 million while revenue increased by 13% q-o-q or 10% y-o-y to RM67 million. The increased revenue on q-o-q basis was attributed to higher demand in foot wear, food & beverages (F&B) and also electronic sectors in Vietnam as well as strong demand from F&B sector in Malaysia. Boxpak will benefit from the strong consumer demand in the region &, as such, it is a good proxy to the the consumer theme play.

Table: Boxpak's last 8 quarterly results

Chart 1: Boxpak's last 19 quarterly results

Financial Position

As at 30/6/2012, Boxpak's financial position is deemed satisfactory with current ratio at 1.7 times and gearing ratio at only 0.2 time. Inventory turnover is healthy at 40 days while debtors' turnover is reasonable at 80 days.


Boxpak (closed at RM2.08 on Friday) is now trading at a PE of 6.7 times (based on last 4 quarters' EPS of 30.68 sen). For a medium-size company, this PE is deemed fairly attractive, with room for expansion to 8-9 times.

Technical Outlook

Boxpak is in a gradual uptrend, rising from a low of RM0.50 to the present price over a period of 3 years. It is currently resting on the horizontal support of RM2.00. Its next resistance is the horizontal line at RM2.50.

Chart 2: Boxpak's weekly chart as at Aug 17, 2012 (Source: Tradesignum)


Based on good financial performance, reasonable valuation & positive technical outlook, Boxpak is a good stock for long-term investment.

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