2月财报季预览.docxVIP

Deutsche Bank Research AustralasiaAustralia Paper PackagingIndustry Paper PackagingDate 1 February 2019Results |Top picksAmcor Ltd (AMC.AX),AUDI 3.68Buy |Top picks Amcor Ltd (AMC.AX),AUDI 3.68 Buy Pact Group (PGH.AX),AUD3.85 Buy Source: Deutsche Bank J | Companies featured Amcor Ltd (AMC.AX),AUDI 3.68 Buy 2018A 2019E 2020E P/E(x) 18.5 14.4 13.2 Div yield (%) 3.9 5.0 5.5 Price/book (x) 12.7 8.9 7.2 Orora (ORA.AX),AUD3.20 Hold 2018A 2019E 2020E P/E(x) 19.0 17.8 16.6 Div yield (%) 3.9 4.2 4.5 Price/book (x) 2.6 2.5 2.4 Pact Group (PGH.AX),AUD3.85 Buy 2018A 2019E 2020E P/E (x) 18.7 13.5 11.0 Div yield (%) 4.2 5.7 7.0 Price/book (x) 3.0 2.5 2.4 Source: Deutsche Bank Mark Wilson, CFA Research Analyst +61-2-8258-1564 Packaging results to be mixed (in-line to slightly disappointing), however, expectations are quite low and raw material costs are easingWe expect the results of the Packaging companies in the upcoming reporting period to be mixed with Amcor and Pact Group broadly meeting market expectations, however, Orora could marginally disappoint given challenging conditions in North America. We expect Amcor to reiterate its full year earnings guidance for constant currency earnings growth, however, we remain of the view that the proposed Bemis acquisition (delayed to the June quarter) will be the key driver of the share price. We expect Pact could upgrade its full year earnings guidance to reflect easing raw material costs in both USD and AUD. While this wont benefit first half earnings, it should certainly benefit the second half. We have Buy ratings on Amcor and Pact, and a Hold rating on Orora. Amcor to report Monday, February 11We expect Amcor to report an underlying net profit of US$336.8m in the 6 months to December, up 2% on pep. The consensus estimate is US$330m. We expect EBIT of US$515.2m, flat on pep, and the consensus estimate is $US517m. We expect the Amcor result to broadly meet market expectations for the half and we expect the company to reiterate its fu