PETALING JAYA: Strong demand, new labour supply and expansion plans will be the main growth catalysts for SKP Resources Bhd
in the quarters ahead, says RHB Research.
The research house said the plastic manufacturer is well-positioned to capture strong seasonal demand orders from “Customer X,” thanks to the arrival of new foreign labour.
“We deemed Customer X’s distinctive customer profile to be more resilient in the challenging global macroeconomic environment going forward.
“Hence, we anticipate sales to accelerate progressively in the second and third quarter of financial year 2023 (2Q23-3Q23), exceeding the historical high level of RM726mil achieved back in 2Q20,” said RHB Research in a report yesterday.
Higher production efficiency on economies of scale on the back of robust demand is expected to keep the group in line with an anticipated 24% earnings growth in FY23, the research house added.
RHB Research made no corrections to its earnings forecast for the group, following a visit to the SKP’s manufacturing site.
Moreover, the group is currently expanding its production facilities and the construction is targeted to be completed by the early of next year.
Adding some 40% to 50% or 650 sq ft to SKP’s total floor space, the expansion will enable the group to not only take on more orders from its existing customers, but also bring in new ones as well.
“Besides, the group will be able to further internalise its production by expanding the printed circuit board assembly and battery pack capacities in the new site,” said RHB Research.
