There are on-going consolidations in the Malaysian packaging material industry. Scientex holds 61.89% in Daibochi after its recent MGO, whilst Can One inches a step closer in gaining full control of Kian Joo. Based on the following list, not sure which company will be the next take-over target….
SLP Resources Bhd
One packaging material company that has caught my interest is SLP Resources Bhd (from a technical perspective). SLP is a Malaysia based company engaged in manufacturing of flexible plastic packaging products, plastic films, and other related products. It provides plastic packaging bags and films for the industrial, household, retail, food and beverages, healthcare and chemical sectors. The company is also involved in trading of polymer products such as resin. It operates in Malaysia and international markets covering Japan, Australia, United Kingdom, Denmark, Singapore and Indonesia. The group generates the majority of its revenue from Japan and Malaysia.
Awaiting for a sustained breakout above $1.28 to confirm the formation of a ‘Double Bottom’ pattern. If Double Bottom is confirmed, we may be looking at a price target of $1.70 (based on price objective of the Double Bottom pattern), with a possible stop loss at $1.06.
Based on our high-level desktop analysis and our very own simple assumptions, we compute an indicative equity value per share of $1.05 which represents approx. 22% lower than the current share price of $1.28 per share.
SLP is a potential short term trading opportunity based on technical study. Subject to further detailed valuation / assessment, SLP is fairly valued at this juncture from a fundamental perspective.
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