BOXPAK: Decent Earnings Continued

Result Update

For QE31/12/2020, Boxpak's net profit dropped 7% q-o-q but rose 101% y-o-y to RM5.9 million while revenue rose 8% q-o-q or 10% y-o-y to RM187 million.

The group revenue increased q-o-q mainly contributed by increase in sales volume in Malaysia, Vietnam and Myanmar operations. As a result of improvement in revenue, the Group's gross profit improved q-o-q from RM21.7 million to RM23.0 million. Consequently, the Group recorded a profit before taxation of RM7.3 million in QE31/12/2020.


Table 1: Boxpak's last 8 quarterly results

Looking at the full year segmental reporting, you can see clearly that Boxpak's earnings turnaround was due to lower operating expenses. 


Table 2: Boxpak's full year segmental performance for FY2020 and FY2019


Graph: Boxpak's last 53 quarterly results

Financial Position

Due to its rapid growth, Boxpak's financial position is a bit stretched. Liquidity is tight with current ratio at 0.94 time as at 31/12/2020 while gearing is elevated with total liabilities to total equity at 1.6 times.

Valuation

Boxpak (closed at RM1.50 yesterday) is now trading at a PE of 15 times (based on last 4 quarters' EPS of 9.95 sen). While the PE ratio is fair, this ratio can improve as the earnings of the company continue to improve. 

Technical Outlook

Boxpak has started on its uptrend. While the uptrend is not strong, it is likely to pick up pace once the MACD cross into the positive territory.


Chart 1: Boxpak's monthly chart as at Feb 24, 2020 (Source: Malaysiastock.biz)

Conclusion

Based on improved financial performance and positive technical outlook, Boxpak is 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.