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This article first appeared in The Edge Financial Daily, on March 29, 2016.

 

NTPM Holdings Bhd
(March 28, RM1)
Maintain neutral and revise target price from 94 sen to 98 sen:
NTPM Holdings Bhd’s earnings are well-supported by the robust demand for its paper products, while being supplemented in the longer run by its Vietnam expansion. 

While we expect stiff competition to persist in the personal care segment, it should be elevated by NTPM’s better product mix. Meanwhile, its earnings for the third quarter ended Jan 31, 2016 (3QFY16) were above expectations at 80% and 87% of our and consensus earnings respectively. 

NTPM declared an interim dividend per share of eight sen. Taking into account higher sales and RHB Research Institute’s US dollar foreign exchange assumption for FY16 to RM4.07 (from RM4.26), we adjust our earnings by 4%, 7% and 11% for FY16 to FY18. 

Key risks to our forecasts are higher operating expenses and sustained competition in the personal care segment. 

We remain “positive” about the robust demand for its paper products, which is in part catalysed by the stronger ringgit. — RHB Research Institute, March 28

NTPM-Holdings_brokercall_fd290316_theedgemarkets

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