KLSE:PPHB
PPHB (8273) - Public Packaging Holding Berhad: This company is still undervalue despite the current bull market
In order to survive in the market, it is pertinent to be versatile and easily adaptive to different market environment. 2015 and 2016 is consider a very tough market because of the lack of participation in the local equity, which is due to foreign fund flowing out, local political issues and scandals, the plummeting oil prices as well as China slowing down. However, come 2017, the local equity market had taken the retailer by storm, and the bullish run had continue to mark it's foot on a 3rd successive month, running till the end of March 2017.
This could be due to numerous of corporate deals unveiling such as Ekovest and IWCity, and subsequently, the latest topic is Alibaba investment into Malaysia to make Malaysia the regional distribution hub. This had indeed open up the Malaysian equity into the global presence as foreign fund start to get attracted into the Malaysian equity once again.
Albeit a lot of stock being mopped up, some with rumors, some with corporate deals and exercises, some with solid fundamental, and of course, some with no particular reason at all. Despite all this run up, I believe that some of you could be searching high and low for yourself to come towards a stock that you can invest in for a long term with sound fundamental and proven earnings.
If you are in this category, then I hope that I might be able to lighten up your findings by introducing you to take a good look into this company. I had took mention in this company in 2014, and it's consistent growth is something that I really think that you as a fundamental investor should not miss, just like how I had detected Arank when it is just 67 cents.
Basically, this company is involved in paper products, which includes designing packaging, manufacturing of corrugated boxes, offset printing, inkjet printing and paper products. This company is the little known Public Packages Holdings Berhad (PPHB - 8273)
I will not be talking a lot here, but present to you a few indicators for you to make your judgement into investing into this company.
1.) Consistent Earning and Growth
Ever since I had noticed this company in 2014, the financial performance of this company had been consistent until this year of 2017. I will summarize the earnings of the company with comparison in Earning Per Share (EPS) from year 2013 to 2016, attached with the snapshot of result.
2013 - EPS 9.30 cents
2014 - EPS 11.26 cents
2015 - EPS 12.93 cents
2016 - EPS 15.02 cents
As you can see, the company continue to deliver the result, and if you are willing to hold for 1 year, according to the trend, probably you will be looking at PPHB to deliver FYE 2017 with EPS of 17 cents.
Based on current valuation, the share is trading at PER x 7 at the current bullish market. If we take PER x 10 into consideration, this company can potentially worth RM 1.50 in no time based on result for FYE 2016.
2.) Break up all time high resistant
PPHB is a small cap with just a small share base of 109.8 million shares. As of lately, PPHB had gained traction, and had broken up on a long term resistant line of RM 1.16. This is supported with an improved result from consistent earnings on year to year basis, and could mark further uptrend for this company.
3.) Company mulls declaring dividend again
PPHB used to be declaring dividend back then. The last time PPHB declare dividend to it's shareholder is 2011. However, due to some diversification into the property investment segment, the company had held back on dividend. But as of current, the company had a healthy cash pile with cash equivalent of almost RM 46 million, which is more than it's current and long term debts.
PPHB will be able to attract institutional fund and fund manager into investing this stock when PPHB start to declare dividend again. Currently, the top 30 shareholder in the company does not have any institutional fund in it. The emergence of institutional fund will be able to make this stock attractive again.
So that's it for you to digest. As I would say, this company is good for long term investment, and be prepared to part away with your cash for at least 1 year in order to see the beautiful return in your investment.
Of course, I would like to add in that as Malaysia is appointed as the regional distribution hub for Alibaba, you can almost instantly smell the potential increase of usage in corrugated boxes which is essential for packaging. Since the local packaging industry had been taking a good hype, why not choose to invest in PPHB which is currently traded at PER x7, below NTA of RM 1.71 and having a proven set of earning for the past 4 years ?
It is your decision time again. If it goes up without you in it, again, you have to ask yourself why.
KLSE:PPHB
PPHB (8273) - Public Packaging Holding Berhad: This company is still undervalue despite the current bull market
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