not vested
Trading Buy: ORNA - 5065
(Last price: RM1.38, Potential upside +15.9%)
Company Profile
• Ornapaper Berhad (ORNA) is involved in the paper packaging industry and is a leader in the corrugated boards and carton manufacturing industry. With the current capacity, the company is able to produce 84,000 M/T of corrugated boards and cartons per annum.
Trading Catalyst
• We noticed the e-commerce sales have been picking up in terms of volumes and transaction values with the recent trending marketing events. With that, the packaging industry should be a proxy towards e-commerce sales, suggesting higher demand in paper packaging, eventually.
• Currently, 9M17 revenue and PAT stood at RM239.9m and 10.9m, which is 20% and 68% higher on the yearly basis compared to the corresponding period.
• Also, we think Orna is trading at decent single digit PE of 8.3x, based on the trailing 12M EPS of 16.6sen.
Technical View
• Resistance: RM1.45 / RM1.52 / RM1.60
• Support: RM1.33 / RM1.31
• Cut loss: RM1.29
Key Financial Stats
• Trailing 12M PE: 8.3x (Peers average: 20.0x).
• Dividend yield: 1.8%
Source: Bloomberg, HLIB