Goodpack

Goodpack: 2QFYJun13 results below expectations. Revenue at US$46.4m, +6% yoy, slower than expected because most of its customers in existing segments experienced slow business activities, which resulted in slower turnaround of its IBC boxes. Net profit came in at US$11.1m, +4% yoy, as employee benefits expense was an earnings drag this quarter, up 27% yoy. Nevertheless Maybank KE believes the overall growth story for Goodpack remains intact, even if profit growth this yr is below par. Thinks 2H13 should see improvements, as Goodpack set up their own depot centres in Europe and US (which started operations in Jan ’13), which is likely to yield cost savings. During the quarter, mgt also bought back some of its previously leased IBS boxes, which should lead to a reduction in lease expenses. The house keeps its Buy rating, with TP $2.15 (from $2.25), pegged to 20x FY13e P/E. CIMB upgrades to Outperform, on a lower TP of $2.04 (from $2.10), notes box demand momentum appears to be picking up and one-off costs should not recur in the quarters ahead.