report from CIMB:

Evergreen Fibreboard
Concerns over impairment losses overdone
FY15 core net profit of RM96m ■ was in line at 96% of our full-year estimate.
■ Final DPS of 1 sen declared, as expected. It announced a dividend policy of at least
25% payout from FY16.
■ Excellent buying opportunity, as concerns over impairment loss are overdone.
■ Potential special dividend if the sale of non-core assets materialises this year.
■ Maintain Add rating. A potential catalyst is continued ringgit weakness.
Operationally no surprises
Revenue and core net profit tracked expectations on a stronger dollar, and lower log and
glue costs. In addition, the internal restructuring efforts also resulted in cost savings.
This resulted in gross margin improving from 25% to 36% in FY15 vs. FY14. For 4Q, its
power plant in Thailand was shut down for two months for refurbishment of the boilers,
which resulted in RM2m in “loss profits” from the sale of steam and electricity to the
Thailand MDF plant.
Exceptional items
An impairment loss of RM3m was taken against its Masai plant and PB plants. We deem
this as non-core. Thus, FY15 core net profit to RM96m was in line at 96% of our full-year
estimate.
Balance sheet and dividends
EVF’s balance sheet remains healthy as net gearing fell from 26% to 8% after the
private placement exercise. EVF has resumed its 25% dividend payout policy from
FY16. Recall that it had suspended its dividend policy during the difficult years. The
resumption of the dividend policy provides positive signal value to shareholders, in our
view.
Concerns about impairment loss are overdone
EVF lost about RM170m in market capitalisation (c.20sen/share) in the few days before
the results announcement on concerns about the size of the impairment losses. We view
the market’s reaction as overdone and unjustified. At only RM3m (multiplied by 12.5x
P/E), these impairment loss should only have had a RM38m impact (c.4 sen/share).
EPS and target price tweaked
We cut our FY16-17F EPS by 2% for housekeeping and update of balance sheet. Our
target is lowered accordingly, still based on FY17 P/E of 12.5x (sector average). We
maintain Add rating.
Excellent buying opportunity
We believe that the recent share price weakness was driven by the strengthening of the
ringgit and concerns about the impairment losses. The current weakness is an excellent
buying opportunity as 1) our forecasts are based on RM/US$ exchange rate of 4.00 vs.
4.20 currently. Every 1% depreciation increases FY16 EPS by 10%; and 2) the
impairment loss was very small and we deem it non-core.

Investment Highlights
 We maintain BUY on Hock Seng Lee Bhd (HSL), with an
unchanged SOP fair value of RM2.30/share.
 Starbiz reported that HSL is awaiting the tender outcome
for package 3 of the Pan Borneo Highway, which could be
valued at over RM1bil, based on the contract values of the
first two packages.
 The package involves a 73km-long stretch from Serian
(65km from Kuching) in Samarahan Division to Pantu in Sri
Aman Division. The 48-month contract could be awarded as
early as end of this month.
 HSL corporate affairs director Sonja Gan was cited as
saying that the scope included extending the 73km- stretch
to a dual carriageway, upgrading of the existing single lane,
the construction of three flyovers, and 20 bridges. The
contract period is slated for 48 months.
 Starbiz reported that the project delivery partner Lebuhraya
Borneo Utara has pre-qualified 17 companies for the
highway project. It reported that priority is given to
Sarawak-based companies as firms from outside Sarawak
are permitted to hold not more than 30% in any JV
submitting bids for the contracts.
 We view HSL as a top contender to land jobs under the
RM27bil Pan Borneo Highway, given its expertise in marine
engineering.
 As it has been noted, HSL boasts of an impressive track
record of already completing ~800km of roads in the state.
Just like steel specialist KKB Engineering, HSL also has engineering capabilities to take on flyovers, underpasses,
and bridges.
 We also believe HSL continues to be the frontrunner for the
remaining phases of the Kuching centralised sewerage
system, which could be valued at another RM3.5bil over 4-5
more packages.
 Meanwhile, HSL is embarking on a major industrial park
project at Muara Tabuan in Kuching for SMEs, with a GDV
of over RM200mil, comprising 195 industrial buildings.
 Starbiz reported that the project on 25ha is expected to be
launched in the next few months. It has been reported that
HSL expects the property segment to contribute ~20% to
group bottom line in FY15. Property made up ~10% of FY14
earnings.
 Maintain Buy: HSL could be a strong beneficiary of jobs
news flow leading up to the impending state elections,
which could now be held earliest in 1Q16.

https://brokingrfs.cimb.com/xn-qmaqnKk7Epc0prapeGEnFBuLkEfWDZGi0g7cJpzP66LfCCXSD0CGQ3TbA_0OzhEK4tDSt8FGgTA2.pdf

here you go the full report...

haha... i find it ridiculously funny when ppl were asking: why EPF and Wellingtons are selling? there must be some bad news... come on friends, fund managers are not value investors and they are speculators!! they trade millions of shares everyday and you are asking why... funny, isn't it...
Secondly, do ur own homework... what is the crude oil price now? less than $27 per barrel and is this a good news or bad news for AirAsia? Do you think oil price will shoot up a lot in the next few years due to the over supply? and do you think AirAsia Indon and Philippines will forever be making a loss? Think twice :)

what happened to QL today? Hike up so much!

honestly speaking, my average price is around RM1 and I am still holding this share... I think it can easily hit RM3.00 when SEB's business improves (that is for SURE ^^)

SUCCESS has quite a lot of export business that is denominated in USD so when USD strengthens against MYR, SUCCESS is the beneficiary of the currency exchange... and the SEB's loss on Samur project is nearing an end, so when SEB gets back into profitability... SUCCESS's profit will be a shock to everyone...

Hi Val-Elta, do you know why there is a huge loss in 2014 (-RM27.7million / -10.34sen EPS)? If the loss for 2015 was due to forex derivative hedging, what was the cause for 2014 loss? Thanks.

Val-Elta, can you share your view on the high directors' fees?
Do you think this is reasonable or the directors are taking too much?
Thanks.

flying already....

any positives heard?

today this counter regains some momentum to move upwards

more and more investors have realized the great potential of GESHEN now!!! good....

hi TomYamGong... it can easily hit >RM2.00 if you believe in me... full year EPS will definitely be >20sen and for FY2016, it can easily hit 30sen EPS...

Loardbaal, can you share more on your insight of Polyplas building second plant? I have not seen this news any where... any report/news link to share? Thanks...

this counter can go as high as RM3.00 as the upcoming quarterly EPS will keep improving due to the strong USD + company's effective internal cost improvement plan... I wont be surprised to see EPS of >30 sen in 2016.

I am quite doubtful where did Bone get all this "exclusive & classified" information... and you may want to question how real these facts are... I am not saying I disapprove all these "insider's news"... but I am skeptical so I weigh it with a pinch of salt... honestly speaking I am also one of SUCCESS shareholders and I will be glad to see SUCCESS share price surge due to the positive news from SEB... but I just hope that someone will be able to verify if all the info mentioned here is real...

well said KC and Icon...

I think Alpha is based on EPS of 32sen x PE10 = RM3.20... hahaha... very optimistic but i like it!!!

I see.. thanks for the good sharing ChartMaster...

bro Alpha... see you again here...haha... u r also one of Evergrn's shareholders.... :)

today the share price flies high....

cheers, iconhuathuathuathuat....

Bro Alpha, I dare not dream of selling at RM3.20... haha... you have guts....

I share the same view as Icon8888's. I will continue to hold this gem. My average price is only RM1.0x and I am not bothered to sell now for profit taking. So why would you? haha...