Sector - Plastics & Packaging
Research by Kenanga
NEUTRAL

"Stretching Longer"

Maintain NEUTRAL. Half of the stock coverages came within our expectation except SLP, SCGM and TOMYPAK for which 3QCY21 results underperformed. Plastic players have increased their ASPs in tandem with the surge in resin prices since July 2021 due to the global freight issue and electricity crisis in China. Moving forward, we expect 4QCY21 results to be better due to: (i) resumption of 100% workforce which will increase output, (ii) elevated ASPs, and (iii) better product mix. We remain neutral on the sector premised on robust market demand and resin capacity expansion helping to moderate rising resin prices.

Koh Huat Soon
E hskoh@kenanga.com.my