Boxpak: Earnings dropped due to goodwill write-off & forex losses

Result Update

For QE31/12/2015, Boxpak's net profit dropped by 85% q-o-q or 65% y-o-y to RM346k while revenue rose by 30% q-o-q or 49% y-o-y to RM145 million.

Revenue rose q-o-q due to pre-festive season sales in Malaysia and Vietnam. Revenue continued its steady rise y-o-y due to increase in customers' demand in Vietnam and the relative strengthening of Vietnam Dong ("VND") against Ringgit Malaysia ("RM").

PBT dropped due to higher operating cost, the write-off of goodwill of RM2.4 million and foreign currency exchange loss of RM5.9 million. If the latter 2 one-off items are excluded, PBT would rise to RM7.3 million- an increase of 99% q-o-q or 2-fold increase y-o-y.


Table: Boxpak's last 8 quarterly results


Chart 1: Boxpak's last 33 quarterly results

Valuation

Boxpak (closed at RM2.50 yesterday) is now trading at a PE of 38 times (based on last 4 quarters' EPS of 15.43 sen). If the 2 one-off items are excluded, Boxpak's EPS would rise to 28 sen and its PER would drop to 9 times. Based on its adjusted PER, Boxpak is deemed quite attractive.

Technical Outlook

Boxpakbroke above the strong horizontal resistance at RM2.50 in October 2015. It made a high of RM3.10 in early November. Since then, the share price has retraced back to RM2.60-2.70.


Chart 2: Boxpak's monthly chart as at Feb 22, 2016 (Source: ShareInvestor.com)

Conclusion

Based on "good" financial performance and "fairly" attractive valuation, Boxpak is a good stock for long-term investment.

Note: 
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, Boxpak