DAIBOCHI Bhd recorded a net profit of RM47.6 mil in its financial year ended July 31, 2020 (FY20), with a revenue of RM619.2 mil, as regional and domestic demand for fully-packaged products (FPP) from the F&B and FMCG sectors remain resilient amid Covid-19 pandemic.
The flexible packaging manufacturer changed its financial year end from Dec 31 to July 31, making the RM47.6 mil net profit its ‘highest’ for the new financial year period.
According to Daibochi executive director Low Jim Wei, the group is already making good progress in its RM100 mil capital expenditure (capex), spanning a two-year period from FY20 to FY21.
The capex was mainly used to purchase new machines that could help boost Daibochi’s annual production capacity by about 60%.
“With the capacity expansions, it could support our commitment to target more opportunities across Southeast Asia and Oceania, as well as further reinforce our position as a trusted provider of flexible packaging solutions to major domestic and global brands,” Low said in a Sept 17 note.
Of the total RM100 mil in capex, RM60 mil is allocated for purchasing 13 machines spanning the printing, lamination and bagging processes. Of this, seven machines were commissioned in the second half of FY20, while another six machines are expected to be commissioned in FY21.
Daibochi has also allocated an additional RM40 mil in FY21 for eight more machines, which would bring expanded capacity to 60% in total, with four machines already contracted to date.
Low also believes that the group’s prospects are further bolstered by the increasing demand for sustainable packaging solutions by MNCs and other prominent brands in Malaysia and regionally.
“Our joint research and development (R&D) prowess with Scientex positions is to capture more opportunities in this nascent but promising area and we are looking to commercialise more sustainable solutions with our clients in the near future,” he said,
As of 9.24am today, Daibochi’s share price went up 1.49% to RM2.72 with a market capitalisation of RM891.8 mil. – Sept 19, 2020