Goodpack

[Thriftville]

Hi all, anyone has interest in researching this company? Seems like a very niche business to design packaging materials for industrial use.



Company Background

The Company was incorporated as Lubrifilm (S) Pte Ltd on 14 February 1980. It changed its name to Goodpack System Pte Ltd on 26 February 1986. In line with the change of its status to a public limited company, it was renamed Goodpack Limited on 20 June 2000. Goodpack® is principally engaged in the business of renting its patented, multi-modal, returnable metal box system, commonly known as Intermediate Bulk Container (IBC). IBC are used for the packaging, transporting and storage of cargoes. Over the years, Goodpack® has been constantly designing and improving its fleet of IBC to meet the diverse packaging needs of different industries. The Company is based in Singapore and through a global network of subsidiaries and regional offices, Goodpack® provides a range of supply chain services and technical support to all its clients globally.

[FFNow]

I've looked into this company before when it was less than $1. Seems like a good company with high margins and ROE.

[yogi]

Though interesting business model (intermediate containers which are returnable) but can be easily copied by competitors. Who stops shipping containers handling companies to foray into this business by leveraging its existing customer and shipping lane network?

The company has significant market shares (which is increasing) in rubber veritical industry. More than 90% revenue comes from rubber industry which exposes to high risk of relying on single industry. Though company has recently taken initiatives to foray in auto-parts and printing vertical industry. Yet to be seen if it would be sucessfull. Lookg like company has tried to get into juice market but no much success.

Also this business seems capital intensive and it is highly subject to steel price. Currently company is enjoying the fleets bought during early part of 2000 decade when steel price was low. As this fleet ageout, company would require to replace it with high steel cost which would require significant capital investment.

Though ROE, ROAs and margins are high but they are slowly declining over last decade. Also dividend-payout ratio is decreasing and consistently high gearing ratio shows that company's free cash flow is decreasing as it has to fund fleet replacement and expansion.

However its comandable that the company could protect margins over the last decade without significant errosion.

[BlackCat]

I took a look last year: http://profithunting.blogspot.com/search/label/Goodpack

Its on my watchlist, not vested

[hongonn]

Good analysis you have there. Last time what got me interested in this stock is they have a patent, and i was looking for whatever Singapore stock owns a patent.

There ain't many stocks owns a patent in Singapore. Other than this is there any others?

Last time i aware they have issues implementing the box logistic system after trying many years still no success. Until recently i read a CIMB report mentioned they got a SAP resource planning system implemented. Not sure is the same logistic system or not.

Hehe, CIMB downgraded it. The reason is sentiment. Like that also can.

"Downgrade from Neutral to Underperform. Goodpack’s trading history shows that weak sentiment could send valuations down to a trough of 5.0x P/E, as in 2008, despite intact fundamentals."

[freedom]

I've looked into this company before when it was less than $1. Seems like a good company with high margins and ROE.

high margins because the business of Goodpack is more like a leasing business (comparable to ship leasing company). The revenue essentially is the lease income. The depreciation is low probably because of its lower book value on balance sheet(if you write down the ship valuation to half, its depreciation will be half, so the margin will be great).

high ROE probably because it records its IBCs on historical cost less depreciation and amortization basis. I am not sure whether they can continue to acquire IBCs as cheap as before(CapitaMall trust would have great ROE if it did not revalue its mall properties).

IMO, the business is quite cyclic. The overall industry depends on world trade and world container transportation. For goodpack itself, it could rely on certain sectors of the world economy, e.g. the natural and synthetic rubber market.

[ngcheeki]

This should be a catalyst to the share price.

"General Motors South Africa (GMSA) implements Goodpack Packaging Solution"

http://info.sgx.com/webcoranncatth.nsf/V...4000C5822/$file/Goodpack_Limited_Press_Release_1_Mar_2012.pdf?openelement

[desmondxyz]

why goodpack slumped today?? Any news coming out?

[l0nEr]

why goodpack slumped today?? Any news coming out?

No idea. Looking for an answer too...
Seems like a huge dump in the last 1 hour, pushing the stock down, particularly with the lack of liquidity.
Always saw last minute dumps in other counters like Olam, Golden Agri, CapitaLand and most of the other index composition. Strange because Goodpack isnt in any index

Might be an opportunity to enter though... waiting for comments.

[hongonn]

why goodpack slumped today?? Any news coming out?

This counter has recovered since. I can't help wondering is it because a smart trader accidentally key in the wrong symbol and sell in bulk? It seems like near closing time someone is dumping a million shares.

Anyone pick up during the slump? Hehe time like i will be hesitate wondering do i don't know something that other people knows etc.