2 August 2012

RHB Research raised Daibochi Plastic and Packaging Industry Bhd’s fair value to RM3.39 per share from RM3.05 citing the packaging material maker’s sustainable profit margin going forward among reasons.

“Despite the anticipation of rising raw material prices, we are comforted by Daibochi’s higher-margin packaging and cost cutting measures to help sustain its margins,” the research house said in a note on Wednesday.

Maintaining its ‘market perform’ on the stock, RHB said Daibochi’s margins could remain sustainable at an earnings before interest and taxes of 11-12 percent helped by efficient waste management and better contribution from higher-margin products.

By 10:05am, the counter remained unchanged at RM3.29 per share, while the broader index rose 0.16 percent. — Reuters