THE BUZZ
Yesterday NTPM’s wholly-owned subsidiary, NTPM International, received an investment certificate from the Vietnam Singapore Industrial Park to establish a subsidiary named NTPM (Vietnam) Co Ltd.
OUR TAKE
Foray into Vietnam. NTPM Vietnam will undertake business activities associated with the manufacture and processing of tissue paper and its related products, as well as semi-finished paper rolls. This will be accomplished in two stages via: i) the manufacture of toilet paper and facial tissue from semi-finished paper rolls from 2014 onwards, and ii) manufacturing semi-finished paper rolls, toilet paper, and facial tissue from paper pulp and recycled paper pulp starting from 2015.
Establishing a regional footprint. The total investment capital allocated for the venture is USD19.1m, of which USD5m will be contributed by NTPM International. The outlay will be funded internally as well as through bank borrowings. This which will increase NTPM’s gearing by approximately 2%. The venture into Vietnam is part of the group’s long-term strategy to move into the regional markets.
Maintain BUY. We believe that NTPM’s efforts in boosting sales, improving operation efficiency and expanding regionally will support its future growth. Maintain BUY, with FV unchanged at RM0.55, based on 13x FY13 EPS.
Source: OSK
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