Tat Seng released its 1H 2020 results, it managed to earn 57.2% higher profit and the trailing pe is at roughly 5.
The company performed well in its gross margins, this is despite an increase in depreciation.
While corrugated prices did fell in the 2nd quarter and recorded a year on year decrease, its fellow competitors have reported worst results which meant that the good results this time round was a positive surprise.
As such, i do believe that some operational efficiencies have worked its magic.
Though more monitoring of the future gross margins would be needed.
In terms of corrugated price trends to Tat Seng’s profits, corrugated prices did not have as huge of a fluctuation compared to previous years which would have aided Tat Seng’s business.
With most of its profits supposed to be in 2H whereby demand is higher due to seasonality factors, there is a very good chance