daibochi plastic & packaging industry berhad · 2019-01-17 · operations highlights financial...
TRANSCRIPT
Daibochi Plastic & Packaging
Industry Berhad
2Q15
Financial Results & Corporate Update
13 August 2015
IR Adviser
AQUILAS
2Q15 Operational Highlights
Boosted by higher exports and product mix…
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Benefitted from higher exports and favorable product mix in 2Q15… also expecting new product line to commence in 3Q15
OPERATIONS REVIEW
• 2Q15 PBT rose faster than revenue y-o-y
» 2Q15 revenue rose 3.1% y-o-y to RM89.7m (2Q14:
RM87.0m) due to higher export sales
- Export sales made up 52% of 2Q15 group revenue
(2Q14: 49%)
- Delivered new orders of sterilisable pouch to Australia
(FMCG sector)
» 2Q15 PBT rose 14.3% y-o-y to RM9.5m (2Q14: RM8.4m)
- Attributed to favourable product mix
- Benefitted from the weaker MYR vs USD
• 2Q15 revenue and PBT also improved q-o-q
» 4.1% revenue growth q-o-q (1Q15: RM86.2m) led by
stronger export sales
- Exports grew 16.2% in absolute value (made up 52% of
2Q15 revenue; 1Q15: 47%)
- Local sales dampened slightly due to GST
implementation
» 2Q15 PBT rose 17.1% q-o-q to RM9.5m (1Q15: RM8.1m)
due to favourable product mix and weaker MYR
• Overall utilization rate currently at 70% with adequate
room for larger orders in future
Growth Strategies
Capturing regional growth opportunities…
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Commercialization of product innovations in 2015… to benefit from replication of ongoing MNC exports to regional markets
GROWTH STRATEGIES
exis
tin
g
Pro
du
cts
/ B
ran
ds n
ew
existing new
Customers / Geographical Markets
New innovations to have multiplier effect in existing and new markets, 1 new product line for Asia Pacific market targeted to commence in 3Q15
Innovations
• High Speed Sealing
• Sterilisable film
1 new product line commenced in 2Q15 for Australia FMCG industry
Existing customer base to sustain growth pace and expose new markets
• In discussions with a leading MNC for new export orders for its F&B product line in Australia
• Expected commencement in mid-2016 to boost top and bottom line
2Q15 Financial Review
Delivering steady performance…
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Improved earnings Q-o-Q due to higher export sales and better product mix… also benefitting from weaker MYR
INCOME STATEMENT
2Q15 to
30.06.15
1Q15 to
31.03.15
Change vs
preceding qtr RM'mil
1H15 to
30.06.15
1H14 to
30.06.14
Change vs
prev period
89.67 86.16 4.1% Revenue 175.83 177.37 (0.9%)
12.51 10.71 16.8% EBITDA 23.23 23.28 (0.2%)
9.61 7.80 23.2% Operating Profit 17.40 17.99 (3.2%)
0.45 0.86 (48.0%) Share of Associate Results 1.31 0.15 805.5%
9.54 8.15 17.1% Pre-tax Profit 17.69 17.24 2.6%
7.19 6.19 16.2% Net Profit to Shareholders 13.38 12.82 4.3%
6.33 5.45 16.1% Basic EPS (sen) 11.78 11.26 4.6%
14.0% 12.4% 1.6 pt EBITDA margin 13.2% 13.1% 0.1 pt
10.6% 9.5% 1.1 pt PBT margin 10.1% 9.7% 0.4 pt
8.0% 7.2% 0.8 pt Net margin 7.6% 7.2% 0.4 pt
68.8
70.6
65.7
73.8
73.4
69.5
87.3
80.2
90.4
87.0
83.1
84.0
86.2
89.7
Quarterly Group Revenue FY2011-2015 (RM ’mil)
5.1
6.4
6.9
6.2
7.1
6.0
7.4
6.9
6.6
6.2
5.0
5.9
6.2
7.2
Quarterly Group PAT FY2011-2015 (RM ’mil)
+3.1% +15.7%
• 1H15 topline largely
maintained despite lower
export sales orders in 1Q15,
and deferred orders for new
product lines to 3Q15
• Net profit higher on the back
of favourable product mix
and weaker MYR
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Healthy balance sheet supporting enlarged operations… net gearing remaining within comfortable level of 0.5x
BALANCE SHEET HIGHLIGHTS
As at 30.6.2015
(Unaudited)
As at 31.12.2014
(Audited)
Remarks
Fixed Assets (excl associate investment,
land held for development & deferred tax)
125.32 123.23
Associate Investment 24.00 22.69
Current Assets 154.37 148.06 Due to higher inventories and trade receivables, in
line with larger production capacity and increased
orders
Current Liabilities 107.10 101.84 Increase in short term bank borrowings to fund
working capital requirements
Shareholders’ Equity 174.77 168.33 Due to increased retained earnings
Total Borrowings 64.54 59.52 Increase in short term bank borrowings to fund
working capital requirements
Cash & Bank Balances 2.87 7.69 To fund purchase of machinery and repayment of
bank borrowings
Net Gearing 0.35 x 0.31 x In line with higher borrowings; still within
manageable level
Return on Average Shareholders’ Equity 15.6% * 14.4%
Return on Average Total Assets 9.0% * 8.3%
FY12 FY13 FY14
NP 27.462 23.743
SE 150.42 162.086 168.331
TA 235.225 280.604 294.046
ROA 10.6% 8.3%
ROE 17.6% 14.4%
* Annualized
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2nd interim single-tier dividend of 4 sen / share payable on 29 Sept ’15 (to shareholders on 3 Sept ’15 ROD)…
DIVIDEND HISTORY
11.7 9.4 10.1 15.2 17.1 14.8 8.5
51.3% 51.6% 50.3% 61.5% 61.3% 62.2% 63.8%
0.0 %
25. 0%
50. 0%
75. 0%
100 .0%
0.0 0
6.0 0
12. 00
18. 00
2009 2010 2011 2012 2013 2014 1H15
Dividend Payout
Dividend Payout (RM 'mil) Payout Ratio
10.4 8.4 9.0 13.3 15.0 13.0 7.5
2009 2010 2011 2012 2013 2014 1H15
Net Dividend Per Share (sen)*
• Dividends in respect of FY2015
• Paid 1st interim single-tier dividend of 3.5 sen per
share amounting to RM4.0 million payout
(paid on 19 June 2015)
• Declared 2nd interim single-tier dividend of 4.0 sen
per share amounting to RM4.55 million payout
(Ex date 3 Sept 2015, payable 29 Sept 2015)
• Daibochi has a dividend policy to distribute
60% of net profits to shareholders *Adjusted for 1-for-2 Bonus Issue, effective 10 September 2012
Stock charts (5-Year & 1-Year)
5YR outperformance:
90.5%
1YR outperformance:
8.5%
08 Aug ‘14 KLCI: 1839.87 DPP:MK: 4.42
10 Aug ’15 KLCI: 1654.37 DPP:MK: 4.35
10 Aug ’10 KLCI: 1359.71 DPP:MK: 2.05*
10 Aug ’15 KLCI: 1654.37 DPP:MK: 4.35
Investment Merits
Proxy to region’s growing appetite…
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Poised for growth via expanding MNC clientele and order size... product innovation to enhance product mix
PROSPECTS AND PLANS
To continuously increase MNC customer base
Poised to support regional clients’ growing production demands
Positive headway in trials for 2-layer film and adoption of high-speed film; To result in favorable product mix going forward
Newly expanded manufacturing capacity to optimize utilization rate CPP film and metallizing utilization rate at 70% currently;
adequate capacity to meet anticipated growth
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Valuations to be compressed with earnings expansion…
VALUATIONS
Share Price @ 10-August 2015 RM4.35*
Market Cap @ 10-August 2015 RM495.3 mil
Trailing PE 20.4 x
Trailing EV/EBITDA 12.9 x
FY14 Dividend Yield 3.0%
* cum 2nd interim single-tier dividend of 4.0 sen to be paid on 29 September 2015
IR Contacts
Mr. Low Jin Wei
T: 06-231 9779
Ms. Julia Pong
T: 012-390 9258
THANK YOU
Bursa: DAIBOCI/8125 Bloomberg: DPP:MK Reuters: DPPM.KL
Corporate Profile
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Market cap of approximately RM500 million…
CORPORATE INFORMATION
DAIBOCHI PLASTIC & PACKAGING INDUSTRY BERHAD
Exchange Main Market, Bursa Malaysia since 1990
(transferred from Second Board in 2003)
Sector Industrial Products
Codes Bursa: 8125 / DAIBOCI
Bloomberg: DPP:MK
Reuters: DPPM.KL
Share Capital RM113.9 mil (113.9 mil shares of RM1 each)
Market Capitalization RM495.3 mil (RM4.35 as at 10 August 2015)
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Commendable track record in serving a wide number of MNC clientele in the F&B industry with stringent quality control…
REGIONAL PRESENCE
• The LARGEST SUPPLIER of Milo packaging in S.E.A
• The SOLE SUPPLIER to Nestle’s Chembong confectionery factory in Malaysia
» Daibochi is also the ONLY S.E.A company on Nestle’s Regional Food Safety Committee
• Supplier of >90% of Cadbury’s flexible packaging in Malaysia
• The MAJOR SUPPLIER of Mondelez International’s biscuits and snacks packaging in
Malaysia
• MAJOR SUPPLIER of flexible packaging to PepsiCo’s Chiang Mai plant for potato chips
manufacturing
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Internationally-certified production facilities that comply with all factory audits by MNC clientele…strength in innovation
PRODUCTION FACILITIES
• Accredited and world-class production facilities
» Attained ISO:9001 and ISO:14001 certifications
» Obtained Food Safety System Certification (FSSC:22000)
in May 2014
• Well-equipped laboratory testing facilities
» To ensure our products consistently exceed customers’
packaging barrier, retention and migration requirements
» Recent breakthrough in producing 2-layer film to
potentially replace conventional 4-layer film
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Integrated end-to-end packaging process… equipped with specialized in-house capabilities
PRODUCTION FACILITIES (CONT’D)
Prepress Cylinder Making
Gravure Printing
Lamination (Extrusion /
Dry)
Slitting / Bagging
CPP Film Metallizer
Up to 9-colour 2-sided printing In-house capabilities Solvent-based/free Capabilities incl Standing Pouch
The only player with in-house cylinder-making, and one of the few with metallizing and
sealing capabilities for quality assurance and constant improvement at key stages
To build high barriers Polypropylene sealing films
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Leading flexible packaging solutions provider, with enviable reputation exceeding 40 years…
CORPORATE TIMELINE
1994 – Acquired fastest extrusion laminator in SEA
1996 - Moved to current Daibochi Plastic 1 premises with >325,000 sq ft built-up area
2001 – Incorporated Australian subsidiary; Accredited with ISO:9001
2009 - Acquired 9th printing machine; Obtained HALAL Certification; Regional supplier for BAT
1999 – Supplier to Nestle M’sia
2002 – Acquired metallizer with Plasma Tech to produce high-barrier films;
Regional Supplier to Nestle in SEA
2008 – Acquired wide web polypropylene film making machine
2007 - Received Gold Award for the Colorpak Packaging Export Award at Australian Packaging Awards
2004 – Acquired M’sia’s 1st 5-layer-blown film machine to produce transparent barrier films
2003 – Transfer to Main Board (now Main Market); Accredited with HACCP
1990 – Acquired metallizer to produce in-house metalized films; Listed on 2nd Board of KLSE (Bursa M’sia)
1987 – Acquired polypropylene film-making machine to produce in-house films
1984 – Started in-house printing cylinder making
1972 – Established in Melaka with 10,000 sq ft plant; Moved to larger premises with 165,527 sq ft
2010 – Obtained Letter of Validation from USA for electronic packaging
2011 – Acquired high-speed printing machine; Acquired metallizer to produce ultra high barrier films; Accredited with ISO:14001
2012 – Set up Cleanroom for bagging process
2013 – Supplier to PepsiCo Thailand (Chiang Mai plant);
Winner of the Top Overall Corporate-Governance Award 2013 in Mid-Cap Category by Minority Shareholders Watchdog Group
2014 – Commenced operations of 2nd manufacturing plant (Daibochi Plastic Plant 2) in Jasin, Melaka; acquired 2nd metallizer and 1st high speed CPP machine
Supplier to leading homegrown instant beverage producer; Obtained Food Safety System Certification (FSSC:22000);
Winner of the Top Overall Corporate-Governance Award 2014 in Mid-Cap Category by Minority Shareholders Watchdog Group
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Wide range of packaging solutions for various product functions… Constantly innovating for changing requirements
PRODUCT APPLICATIONS
Film Type Applications / Use
High Permeability Barrier / Performance
Coffee, Nuts, Potato Chips
Cost Effective Barrier Snacks, Biscuits, Wafer, Chocolate,
Cakes
General Packaging Outer Pack, Noodles, Biscuits, Wafers
Specialty Application Labelling, Ice-cream, Frozen Food,
Cereal Peel Seal, Seasoning Oil,
Powder / Liquid Detergent,
Shower Foam, Tobacco, Pet food
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Experienced management with industry expertise…
KEY MANAGEMENT
Thomas Lim Soo Koon, Managing Director
- Holds a degree in Bachelor of Science Industrial Engineering and Management from Oklahoma State University, &
Master of Business Administration degree from Oklahoma State University.
- Joined Daibochi in 1995, and was appointed as Managing Director in February 2005.
- Played a key role in building Group’s MNC clientele.
Datuk Wira Wong Soon Lim, Executive Director
- An accountant by training and a member of the Malaysian Association of the Institute of Chartered Secretaries and
Administrators.
- Has an extensive experience and knowledge in the field of accounting, finance, consultancy, corporate finance,
manufacturing and property development. Instrumental in listing of the Company.
Low Chan Tian, Executive Director
- Holds a degree in Bachelor of Engineering from the University of Western Australia.
- Has wide experience in manufacturing, property development, business and finance.
Low Jin Wei, Executive Director
- Holds a degree in Bachelor of Commerce (Major in Finance & Marketing) from University of Sydney, NSW, Australia.
- Prior to this, Mr. Low was the Managing Director / Project Director of GlassKote (Malaysia) Sdn Bhd from 2005 to
September 2010.
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Institutional investors holding approximately 30%...
MAJOR SHAREHOLDERS
No. of shares (‘mil) (30.6.2015)
Percentage *
Low Chan Tian, ED 10.10 8.9%
Apollo Asia Fund Ltd 10.66 9.4%
Lim Koy Peng 8.62 7.6%
Datuk Wira Wong Soon Lim, ED 6.57 5.8%
Halley Sicav – Halley Asian Prosperity 6.27 5.5%
Teh Kim Hong 6.18 5.4%
* Excluding 299,200 shares bought back by the Company and retained as treasury shares as at 30-June 2015
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Growth in flexible packaging to be led by the Asian region… penetration into new product categories to bring next wave
INDUSTRY INSIGHT
• Worldwide consumer flexible packaging market worth $92 bil in 2015 – Estimated to grow 4% p.a. to reach $114 bil in 2020
– Growth to be led by Asia Pacific & other emerging regions (e.g. South & Central America)
Source: Smithers’ Pira – The Global Flexible Packaging Market – Trends and Forecasts
• Growth catalysts for Asia’s flexible packaging market: – Higher demand for cheaper and smaller pack sizes in line with affordability of general
population (especially post economic slowdown)
– Increase in working mothers / dual-income households leading to preference for convenience
packaging
– Development of multinational food retailers and manufacturers in the region; indicating the
long-term growth potential in Asia
Source: The Asia Pacific Flexible Packaging Market to 2016 by PCI Consulting Films Ltd