GW Plastics (GWP) is one of the leading producers of Flexible Plastic Packaging (FPP) in Malaysia. FPP is used in a wide range of industries such as F&B, logistics, industrial, household products and pharmaceutical, just to name a few.
Through capacity expansion and penetrating into new markets like China, USA, Russia and Africa, GWP hopes to strengthen its position in the FPP market. With a better investors’ understanding of the FPP sector, we think there is a good chance that the company is able to ride on this trend. Peg to a target P/E of 12x, similar of that to Daibochi, the indicative target price for GWP is RM0.88. It represents an upside potential of 16% over its IPO price. Potential re-rating catalysts being 1) capacity expansion, 2) resilient business model and 3) rising demand for FPP products.
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