OCBC upgrades Goodpack to Buy; $1.80 fair value

OCBC upgrades Goodpack (G05.SG) to Buy with an unchanged fair value estimate of $1.80 as it expects the company to benefit from the official opening of Lanxess's synthetic rubber plant in Singapore.

"We expect production to commence in 1QFY14, and Goodpack will be able to benefit correspondingly given the additional IBCs that it had procured earlier," the house says.

OCBC notes that the plant will only reach full capacity utilization by 2015, "so that means Goodpack will be able to enjoy incremental earnings until the plant reaches a steady state of production."

The stock fell as much as 4.4% since the aftermath of its 3Q13 results release; the house believes this price correction presents an opportunity for investors to gain exposure to an important player in the IBC market, and indirect beneficiary of the growing middle class in China and India.

The stock is up 0.3% at $1.67.