.png)
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.
No comments:
Post a Comment