Goodpack

Goodpack: StanChart maintains at Outperform, raises TP slightly to $2.35 from $2.23. While the house notes potential higher financial costs, net gearing at 20% remains healthy. Says the Auto parts business remains a key growth catalyst, on the back of potential major contract wins coming through. Notes Goodpack’s large-scale low cost Intermediate Bulk Containers (IBC) fleet, coupled with its global network across 68 countries and long term customer relationships, are key barriers to entry that has sustained Goodpack’s EBITDA margins at >40% in the past decade. Estimates the value of Goodpack’s IBCs at US$700m or 80% of enterprise value (EV). Notes Goodpack’s under-valuation is reflected in the recent Brambles acquisition of Pallecon at EV/IBC of US$983 – 3x higher than Goodpack’s EV/IBC value – despite Pallecon’s smaller scale and lower margins.