CIMB Research keeps Daibochi (8125.KU) as Outperform with unchanged MYR4.60 Target

CIMB Research keeps Daibochi (8125.KU) as Outperform with unchanged MYR4.60 target based on 12X CY11 P/E target, which factors in a 20% discount to our 15x target PE for the market. "Factors that could catalyse the stock include further margin expansion over the next few quarters, contracts from major non-F&B companies and, investors' increasing awareness of its attractive dividend yield of 7%, says analyst Nigel Foo. "Daibochi has the potential to pay higher dividends if the non-food and beverage business takes off in a major way over the next few quarters," says Foo; adds company's balance sheet strong, at only 0.1X net gearing as at end-2009. Stock last +2.3% at MYR3.54

CIMB Research keeps Daibochi Plastic (8125.KU) as Outperform

0557 GMT [Dow Jones] STOCK CALL: CIMB Research keeps Daibochi Plastic (8125.KU) as Outperform, raises target to MYR4.60 from MYR4.50 earlier based on unchanged 2010-12 P/E; this, after raising FY10-12 earnings forecasts by 1-3% to factor in contributions from more profitable new ventures in Australia, non-food and beverage segment. "One nice surprise was the news that Daibochi has already started to supply packaging to Fonterra (the world's largest exporter of dairy products) as we had expected this to take off in 2H10," says analyst Nigel Foo; adds venture into the packaging market for the electrical & electronics industry also appears to be making better progress than we expected. "Daibochi might secure certification for this product this year compared to our expectations of next year," says Foo. Stock last down 0.6% at MYR3.36. (ECH)

Daibochi trial run products progressing well (tp=4.4)

Trial run products progressing well. Daibochi’s trial run for the packaging of a dairy product for a major dairy producer is well on track, and accordingly, orders have started gaining pace in 1Q10. We also understand that Daibochi has since started on some samples for the group’s other product ranges. Given that the dairy industry is a niche industry, requiring some rigid technical knowledge, we understand that it is not an easily penetratable industry and thus, margins are generally on the higher-end.

Daibochi's Pre-Tax Profit Triples To RM27 Million In FY09

KUALA LUMPUR, Feb 10 (Bernama) -- Daibochi Plastic and Packaging Industry Bhd's pre-tax profit for the financial year ended Dec 31, 2009 more than tripled to RM27.141 million from RM9.01 million registered the previous year.

Revenue was also higher at RM221.79 million compared with RM217.17 million recorded in 2008, Daibochi said in a statement today.

The group attributed the excellent performance to higher overseas sales, improved operations, larger customer base and product mix.

Managing Director Thomas Lim said Daibochi's new product innovations such as metallised packaging and new sealing films saw greater acceptance among its customers.

"We have also seen initial success in growing our premium customer base both locally and regionally," he added.

Moving forward, Lim said the group planned to tap opportunities in the emerging new market of healthcare.

"We believe this strategy will effectively broaden our revenue base and go a long way in adding substance to our business model," Lim added.

Daibochi Plastic & Packaging

Maybank Investment rates Daibochi Plastic & Packaging (8125.KU) at Accumulate based on charts with upside targets at MYR3.33, MYR3.83. Technical analyst Lee Cheng Hooi says stock made minor Wave 4 low of MYR2.00 in November, with grossly oversold signals. "The stock is in a firm major Wave 3 uptrend, confirmed by the positive crossover from the CCI, DMI, MACD, Stochastic and Oscillator indicators," says Lee; adds, stock will continue to rise, test next resistance at MYR3.25, towards target levels. Stock +1.4% at MYR2.98. On downside, support seen at MYR2.94, then MYR2.48; stop loss at MYR2.46. (KPL)