Malaysia Business News From Newspapers, Blogs, Broker House.

Thursday, November 6, 2014

'Like' - Heveaboard (Proxy To US Recovery & Strenthening USD).


The Malaysian furniture manufacturers are now (Nov 2014) enjoying a revival in fortunes, helped by recovery in the key export markets, particularly the US and Japan and an industry consolidation exercise that has seen the exit of smaller players.

It is one such company that has benefited from the furniture industry’s revival and offers investors an attractively priced exposure to the sector The stock is trading at a trailing 12 month PER of 5.8 times and a low PER of 0.7 times. Its net gearing was 38.7% in 2013 with decreasing long term borrowings.

The company manufactures a wide range of particleboard and particleboard based products as well as downstream particleboard based Ready To Assemble furniture. About 85% of its products are exported.

It has been profitable with fairly consistent earnings in recent years except for a large dip in 2011 due to the weak USD then. In 2013, its net profit surged 45% year on year to rm22.5 million with an ROE of 10.2%.

With a strong recovery in the housing markets in the US and Japan, prospects for the furniture industry are looking more positive.

The strengthening of the USD in Oct – Nov 2014 against the ringgit would also be positive for the company since its revenue is mainly USD denominated and will improve the company’s export competitiveness.

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