KUALA LUMPUR (Oct 3): Kenanga Research has maintained “neutral” on the plastic packaging sector, and expects the sector to see a pickup in orders over the coming quarters, as customers replenish their depleted inventories as well as stock up in anticipation of price hikes, following the uptrend in the price of input resin in recent months.
In a sector update on Tuesday, the research house said it believes a more sustained recovery will still hinge on an improving global economic outlook.
“Meanwhile, local players are turning sustainability from a threat to the plastic packaging industry to an opportunity by moving aggressively into the production of sustainable packaging materials in response to growing demand for high-performance but recyclable packaging solutions.
“Our sector top pick is Teck Guan Perdana Bhd ('outperform'; target price: RM3.05),” it said.
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