KUCHING: NTPM Holdings Bhd’s (NTPM) performance going forward is set to remain bright, driven by the group’s on going efforts in driving sales, prudent cost controls, constant product improvement and its recent regional expansion into Vietnam.
According to RHB Research Institute Sdn Bhd (RHB Research) in a research note yesterday, NTPM’s revenue and net profit for the first nine months of the financial year 2013 (9MFY13) rose eight and 10 per cent year on year (y-o-y) respectively.
“NTPM’s turnover grew by eight per cent y-o-y from RM334.2 million to RM360.9 million, largely attributed to a topline growth of 47 per cent in its personal care segment, which offset the tissue products segment’s negative revenue growth (a decrease of 1.2 per cent) due to weaker exports,” the research firm explained.
Additionally, it outlined, the ‘Dragon Baby’ boom lifted NTPM’s diaper sales domestically, which translated into higher sales for the personal care segment.
“The group’s earnings (an increase of 10 per cent y-o-y) were bolstered by better profit before tax (PBT) from both the personal care and paper products segments.
Furthermore, it said, PBT in the personal care segment surged 90.5 per cent y-o-y, fueled by higher contribution from the sale of diapers while PBT for tissue products expanded by 8.4 per cent y-o-y, supported by higher margins.
The research firm noted, vis-à-vis the preceding quarter, revenue and net profit rose by 7.6 per cent and 12.2 per cent respectively.
With regards to NTPM’s margins, the research firm highlighted the group’s earnings before interest and tax, and PBT margins improved by 100 basis points and 90 basis points y-o-y respectively, mainly due to stable commodity prices and better sales.
It added, “The PBT margin from tissue paper sales increased from 14.6 to 16 per cent while its personal care segment’s PBT margin widened from 6.2 to 8.1 per cent y-o-y.”
Looking ahead, RHB Research expected the group’s margins to be sustainable in view of favourable paper pulp prices.
As such, the research firm derived the group’s fair value at an unchanged 55 sen per share.