SCG Packaging (SCGP), a subsidiary of Siam Cement (SCC), announced a solid gain on its first-quarter net profit of 2.13 billion baht, rising 23 per cent from 2020 and 44 per cent from the last quarter, beating expectations.
The first-quarter result of SCGP beat market estimates by 25 per cent. This positive sentiment drove the share price up on Tuesday, closing the market by surging 5.56 per cent to 52.25 baht.
The company saw an increase in sales revenue of 12 per cent year-on-year to 27.25 billion baht based on demand growth in ASEAN customers, higher regional paper price, and the consolidation of the oversea business, namely Go-Pak UK and Bien Hoa Packaging in Vietnam.
Analysts at Krungsri Securities raised SCGP’s earning’s forecasts up 16 per cent to 8.6 billion baht for 2021 and 15 per cent to 9.3 billion baht for 2022 to reflect healthier margins than expected.
Better-than-expected results were mainly from higher gross processing margin for all three products in the integrated packaging chain, packaging paper, and fibre-based and polymer-based packaging.
Krungsri also revised up SCGP’s target price from the earlier 52 baht to 60 baht with a ‘Buy’ rating given continuous earnings growth driven by acquisition deals and better product margins.
After the trade began on Wednesday, SCGP shares bounced to a new high by 2.87 per cent to 53.75 baht, accounting for transaction value of 756.57 million baht.
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