TOMYPAK (7285) : Tomypak upgraded to Hold at CIMB Research
KUALA LUMPUR: CIMB Equities Research has upgraded Tomypak from Reduce to Hold as share price downside looks limited with floor support at RM1.30.
At RM1.30, it was the price which new major shareholder Yong Kwet On paid for a 25.4% stake, it said on Monday.
“For exposure in the packaging sector, we prefer Thong Guan Industries,” said the research house.
CIMB Research had been negative on the stock since May due to the weak quarterly earnings results. Since then, its share price has been sideways.
“Until its earnings show continued signs of recovery, we are switching the valuation basis from earnings to a more conservative asset-based tool; 1.3 times 12-months average price-to-book value (P/BV) values the stock at RM1.37,” it said.
CIMB Research said Tomypak’s 3Q14 results were in line with its expectation, with the annualised 9MFY14 net profit coming in at 101% of our full-year forecast.
“We maintain our EPS forecasts but until Tomypak’s quarterly earnings show continued signs of recovery, we are switching our valuation basis from earnings (previously 7.8 times P/E, 30% discount to Daibochi P/E target) to asset-based.
"As a result, our target price rises to RM1.37, now pegged at 1.3 times 12-months average P/BV,” it said. - The Star
KUALA LUMPUR: CIMB Equities Research has upgraded Tomypak from Reduce to Hold as share price downside looks limited with floor support at RM1.30.
At RM1.30, it was the price which new major shareholder Yong Kwet On paid for a 25.4% stake, it said on Monday.
“For exposure in the packaging sector, we prefer Thong Guan Industries,” said the research house.
CIMB Research had been negative on the stock since May due to the weak quarterly earnings results. Since then, its share price has been sideways.
“Until its earnings show continued signs of recovery, we are switching the valuation basis from earnings to a more conservative asset-based tool; 1.3 times 12-months average price-to-book value (P/BV) values the stock at RM1.37,” it said.
CIMB Research said Tomypak’s 3Q14 results were in line with its expectation, with the annualised 9MFY14 net profit coming in at 101% of our full-year forecast.
“We maintain our EPS forecasts but until Tomypak’s quarterly earnings show continued signs of recovery, we are switching our valuation basis from earnings (previously 7.8 times P/E, 30% discount to Daibochi P/E target) to asset-based.
"As a result, our target price rises to RM1.37, now pegged at 1.3 times 12-months average P/BV,” it said. - The Star
