Tomypak’s major MNC customers include Nestle, Kraft and Unilever. MNCs currently contribute around 40-45% of the group’s revenue. Nestle is Tomypak’s largest MNC, supplying for the domestic, Philippine and South Africa markets. Other major customers include listed food companies like Mamee and Apollo Food.
Tomypak’s share split and bonus issue were ex on 1 Sep, raising its share base from 43m to 108.3m shares and should improve the stock’s trading liquidity.
After peaking at 52-week high of RM1.55 on 28 July, Tomypak has been undergoing a triangle consolidation. However, there are signs of impending breakout above DTL, supported by the MFI and MACD gaining strength. It seems that Tomypak has found its temporary low at RM1.20 following its share split and bonus issue and is still gyrating in an uptrend channel, indicating that the recovery trend is still intact.
We expect TOMYPAK to breach the DTL resistance around RM1.42 (76.4% FR from the top of RM1.55 and low of RM1) after undergoing a brief consolidation amid toppish slow stochastics. Upon further breakout, upside resistance are situated around RM1.55-1.65 zone. We see this as a low-risk buy but always put a stop below RM1.20.
