PETALING JAYA: SLP Resources Bhd
is expected to gain better margins ahead underpinned by new export orders from the recently secured Japanese customer with orders set to begin in the second quarter ending Dec 31, 2025 (2Q25).
In 1Q25, SLP posted a slightly lower net profit of RM3.27mil or a basic earnings per share of 1.03 sen from RM4.94mil or 1.56 sen a year ago.
This is despite posting a slightly higher revenue of RM41.07mil from RM40.8mil.
SLP declared a dividend of one sen per share for the quarter, which was slightly below Kenanga Research’s full-year forecast of 4.8 sen.
The 31% year-on-year decline in net profit was mainly due to changes in product sales mix and higher operating costs arising from increased minimum wages.
“We deem it broadly in line with our expectations as we expect stronger revenue ahead, given the group having recently secured a new Japanese customer, with orders set to begin in 2Q25,” it said in a report.
While profit margins were compressed this quarter, Kenanga Research remains optimistic about SLP’s recovery ahead, particularly with the expected contribution from the new Japanese customer.
Japan continues to be a key market for SLP, contributing between 30% and 40% of its total plastic packaging sales.
The company expected demand to improve for its kitchen and garbage bag products as consumption in Japan picks up, helped by a rebound in tourism activity.
Beyond Japan, SLP is actively expanding into other export markets including New Zealand. This diversification strategy is expected to reduce the group’s reliance on any single market and help mitigate the impact of rising operational costs, including utilities and wages.
On the global front, the potential imposition of US tariffs on Malaysian exports is expected to have minimal impact on the group, as the United States contributes less than 3% to its overall revenue. Kenanga Research maintained an “outperform” call on SLP with a target price of RM1 apiece.
