HLIB target price RM4.22

insiders are buying. that's a good endorsement of its future prospect

time for re-rating

beneficiary of trade war
has no China exposure (v.VS)
strong balance sheet
high return on capital

very much undervalued.

it remains a pipe dream for the company to hit 1billion market cap

a quick glance, perhaps valuation was overly optimistic? PE 30x

looking forward to 40sen earnings

Superlon growth story is only at infant stage.

I like companies with exposures to the Vietnam market. Vietnam economy is growing explosively.

John Neff and Peter Lynch would have endorse Poh Huat!

in my opinion, PE 7x is unreasonable. strip of 43sen net cash, we are talking about PE of 3-4x.

not like the company is destroyer of value. top and bottom line growth. strong balance sheet. healthy free cash flows. ROE >10%.

Posted by Icon8888 > Sep 26, 2019 2:44 PM | Report Abuse

Fair value RM4

Still Long way to go


Mine is about RM5. Trust me, its not a number randomly pick from the sky.

i can afford to wait for market to close the gap.

Finally, the dinasaur has moved. A bit.

the more i read on the prospect of Vietnam economy, im really impressed.

it's one of the fastest-growing economy in the world, growing above 7-10% in the next decade

looking to buy some stocks with exposure to the Vietnam economy, HLIND is one good proxy

@cherry88

i believe PoHuat has the potential to increase their dividend payout. over the last 2 years, they have spent a substantial amount of capex. moving forward, capex is lower hence higher FCF supporting higher dividend. look at latest quarter, their FCF has increased substantially, amount to 8% cash yield.

Posted by cherry88 > Sep 24, 2019 10:39 AM | Report Abuse

Wah...Affin maintain its target price at RM1.48 while TA upgrade to RM2.06. why so much difference ? Let's take average of RM1.77 with our target (revise downward from RM2)


What you should focus from their reports is their earnings forecast.

FY2021
Affin 23.7sen
TA 22.7sen
AmInvest 22sen

FY2020
Affin 21.8sen
TA 20.5sen

The forecasts are fairly similar. what differs in their target price is the choice of PE multiple, which is driven by market sentiment.

as highlighted by AmInvest, very likely a favourable bias towards market perception for furniture stocks given the positive structural change i.e. trade diversion from the trade war benefiting furniture companies, particularly PoHuat.

do their valuations deserve a 7x, 8x or 10x? is anyone guess. but what is certain positive catalysts is in place. their earnings for FY2019 would be significantly better.

Management sounds positive too.
"The protracted trade war has resulted in the shift in the global supply chain and bought about some positive surprises to several countries in the South East Asia region. For the global furniture trade, Vietnam is expected to benefit the most, with furniture exports increasing by 30% this year, followed by Malaysia as orders shift to
these South East Asia exporters. There are now clear indications of permanent structural changes in the supply chain as more and more manufacturers relocate out of China to this region.

As part of the global supply chain, we have registered increased orders for both our Malaysian and Vietnamese operations. We have adapted our production activities to accommodate a wider range of products for our US customers. We are beginning to see improved operational results, particularly from Vietnam where we have
enjoyed smoother production runs following the adjustment period."

net cash of 43sen, valuation is dirt cheap considering current PE is only 6-7x.

historically, Q4 is their strongest earnings. even a modest 8 sen would resulted in full year EPS of 24sen above my expectation of 22sen.

US dollar is strong against Asian and emerging currencies. Expect it to strengthen to 4.26 next year. key event to watch is on the possibility of Malaysia being excluded from the FTSE Bond Index.

currency aside, the trade diversion due to the tariffs is also expected to benefits Malaysian furniture exporters via increased sales to the US.

2 positive catalysts awaiting furniture stocks.

anchor on 10x multiple, Liihen should head towards RM4.
40sen full year EPS is achievable, similar to what they earned back in 2016.

a lot of funds are losing patience.

but at current price, it's a very nice yield

1.6sen dividend on Friday. 2% yield better than nothing.

22sen is achievable. i believe Pohuat is able to pay out 8 sen dividend, similar to 2 years ago.

at 10x PE which is not excessive given its net cash position and growth rate, we should be looking at 2.20

Look at Magni, patience gets rewarded :)

This year would see maiden profit recognition from its project in Melbourne.

be patient, RainT

this year bodes well for furniture companies. increased sales from US due to trade diversion and strengthening of USD y-o-y

Liihen and Pohuat would do well. foresee earnings of 40sen and 22sen respectively

Based on our estimates, key Malaysian furniture companies now trade at 7–8x their forward earnings, which is rather consistent with their average historical forward P/Es. Given the positive structural change driven by the trade diversion from the US-China trade war, we believe that their valuations should be re-rated 8–10x higher (Exhibit 9).

The furniture sector in Malaysia appears to be a clear winner of the trade diversion arising from the US-China trade war. The US Commerce Department first slapped a 10% tariff on furniture imports from China in September 2018. The tariff has been raised to 25% since June 2019 and will be further increased to 30% from December 2019 (Exhibit 1). As furniture exports from Malaysia are spared the tariff, this translates to a tremendous price advantage for Malaysian furniture exporters over their Chinese peers in the US market.

We gathered from furniture companies we met up with recently that they have indeed benefited from the trade diversion from the ongoing US-China trade war. They have seen increased orders, at both their operations in Malaysia and Vietnam (for those who have expanded their operations to Vietnam).

In Malaysia, Poh Huat Resources for instance, has guided for its sales to the US from its Malaysian operations to increase by another 30% in FY19 (Oct), after surging by a third in FY18. We understand that Poh Huat Resources has spent close to RM20mil in capex for its Malaysian operations over the last 24 months, which is 4x the amount it spent in FY16–17. Over the last 1–2 years, Poh Huat Resources has seen higher orders from its existing customers and signed on new customers. It was also urged to expand its product range.

wow, this is getting cheaper. between eco and mahsing, opted to allocate funds to the latter due to the coming dividend. but at this price, eco is very interesting.

i have been busy collecting stocks, albeit cautiously though it didn't prevent it from going lower and lower from my purchase price. lol

what have you been buying, Jon?

problems in democracy if not solved are susceptible being replaced by military dictatorship (example Chile)

might buy some if it drops to 80 sen

Bought some Kawan. Resilient business

any interesting news lately?

if u have a longer term view, LHI fits as a growth stock in ur portfolio. Tong from The Edge also bought LHI.

@icon888 you too bought eco?

wonder why the price keep dropping

oriental is one big lazy dinasaur. but with annual dividend of 40sen, you are getting above 6% yield. defensive stock for one's portfolio.

Given the current environment, late economic cycle, perhaps holding cash is not a bad decision afterall. for one, you could protect yourself from the massive drop in asset prices. and secondly, you are in a better position to take advantage of other people's risk aversion. of course, how much allocation to cash is very subjective. no one rule fits all.

perhaps 90sen by end of today?

@RainT

which REIT has the highest yield?

market cap is 70mil++, sushi king itself is worth triple of that

are you considering adding gold to your portfolio? haha

Malaysian furniture exports to the US seen growing 20% annually

https://www.theedgemarkets.com/article/malaysian-furniture-exports-us-seen-growing-20-annually

bought some 7.96

i would be happy to collect if it drops below 1, literally getting the business for free.

Long term would do well. Proxy to growing ASEAN market.

On board at 94sen.

Leong Hup looks interesting at current price. LHI is trading at about half of QL's PE. It's profit margin is comparable, even slightly better than QL (poutry segment). of course, QL is more diversified hence more resilient as compared to LHI which is very sensitive to changing demand and supply dynamics.

tempted to buy some blue chip

flight to quality?

SAM steadily up

if u looking for turnaround play, i prefer Superlon. it's safer bet. and the co is in net cash.

you bought when Tong from The Edge sold. He realised 50% loss on SCGM.

good cash flows. strong balance sheet. net cash is 50% of market capitalization.

earnings are recovering, albeit gradually.