22 February 2012

KUCHING: Daibochi Plastic and Packaging Industry Bhd (Daibochi) expects the Australian market to continue to support growth going forward.

According to RHB Research Institute Sdn Bhd (RHB Research), Australia currently contributed only 16 per cent of total revenue in the financial year 2011 but the market growth of 15.5 per cent year-on-year continued to outpace the Malaysia market growth of 4.8 per cent.

It was in qualification process for a new customer for pet food packaging and should commence sales in the coming quarter, the analyst added.

Separately, Daibochi highlighted that the progress for a potential new major customer for a multinational corporation in the food and beverage industry had been positive. It had successfully passed technical qualification for quality issues but was waiting approval for the commercialisation phase.

RHB Research affirmed that in the fourth quarter of financial year 2011, Daibochi’s revenue grew by 11.9 per cent quarter-on-quarter due to higher capacity utilisation on the back of the recovery in machinery and higher sales volume. This translated into a net payout and net yield of 51 per cent and 4.6 per cent respectively.

However, there were some risks that included a sharp spike in raw material prices, product contamination, loss of contracts from major customers and shutdown or plant accidents.

Daibochi reported a financial year net profit of RM20.1 million and declared a fourth interim tax-exempt dividend of four sen in the fourth quarter of the financial year 2011, bringing the total year-to-date dividend to 13.5 sen. The fair value was pegged at RM2.78 per share based on 9.5 times of the financial year 2012 earnings per share.