KUALA LUMPUR: Public Investment Bank Bhd (PublicInvest Research) has dropped its coverage of BP Plastics Holding Bhd, saying there is little to spark investor interest or support a re-rating, after wrapping up its research commitments on the stock.

The research house said its projections should no longer be relied upon as a guide for investment decisions. Its last recommendation on the Main Market counter was "Neutral" with a target price of RM1. The stock was trading at 82 sen at press time.

Before ceasing coverage, PublicInvest pointed out that the outlook for the flexible plastic packaging sector remains challenging, weighed down by global uncertainties, rising costs and supply-demand imbalances.

Still, it said BP Plastics is cushioned by a debt-free balance sheet and RM57.2 million in cash reserves, leaving it in a position to capitalise when demand recovers.

BP Plastics reported a net profit of RM900,000 in the second quarter ended June 30, 2025, down 89.3 per cent from a year earlier, as weaker sales, tighter margins from heightened competition and foreign exchange losses ate into earnings.

Half-year net profit stood at RM5.4 million, meeting only 19.3 per cent of PublicInvest's full-year forecast and 18.4 per cent of consensus estimates. No dividend was declared for the quarter.

Quarterly revenue dropped 16.8 per cent to RM100.6 million, dragged by a 24.3 per cent slide in export sales to RM67.7 million on softer global demand and a firmer ringgit. The group's pre-tax profit margin shrank to one per cent, compared with 8.1 per cent in the same quarter last year.