Posted by Kang Yao > 2017-05-16 07:55 | Report Abuse

Hevea recently bought a piece of land from their directors, 3.13ha for rm13mm(rm40/sqft).

Based on the valuation from their list of properties, their current factory land is value at rm30/sqft. and adjacent available factory for sale with building is rm50/psft, empty land which just sit across the main road is rm19/sqft

Is it overpriced? anyone look into this?

Posted by Can17 > 2017-05-16 09:12 | Report Abuse

Kang Yao. From your analysis, it looks overpriced.

Posted by simonc > 2017-05-16 09:56 | Report Abuse

Ezra, you can find more about PB v ROE in this link http://www.investopedia.com/ask/answers/010915/does-high-price-book-ratio-correspond-high-roe.asp

Posted by specter > 2017-05-16 10:12 | Report Abuse

Lol look at the endless criticism from those who badmouth about Hevea are actually the ones interested to buy.

Hevea is seriously expanding its footprint not only in overseas market but also domestically. This will be positive for the company because in the event that Ringgit appreciates further, the domestic sales will cushion the FX risks.

Posted by specter > 2017-05-16 10:25 | Report Abuse

I'm seeing an +15% upside in share price appreciation. In addition to that, there are dividend payouts at every quarter. Both of these combined are making Hevea's shares attractive for accumulation and to hold long terms.

Currently, its high cash holdings of RM 128m and low debts of RM 15m coupled with earning power of RM 20m per quarter. These are strong growth metrics.

MOATs include strong branding KreaKids (first Malaysian company to produce low formaldehyde particleboard RTA), highly affordable Heveapac RTA products, and possible "Gourmet fungi" business. They registered a new company Heveagro Sdn Bhd which is worth to watch out since this could propel the company forward in new growth areas.

http://www.bursamalaysia.com/market/listed-companies/company-announcements/5354825

Posted by hng33 > 2017-05-16 10:38 | Report Abuse

accumulate more hevea at 1.31-1.32

Posted by shyityng > 2017-05-16 10:38 | Report Abuse

Saw80% of particle furnitures in aeon are heveaboard. Personally I feel the quality is better compared to other chaplang brand. Thus I have faith in this stock. My biggest stock portfolio.

Posted by simonc > 2017-05-16 10:46 | Report Abuse

9 days RSI = 11.11..........way oversold...technical rebound on the way

Posted by specter > 2017-05-16 11:15 | Report Abuse

shyityng, thanks for sharing ground info. Good to know that most hypermarkets now have Hevea's RTA products that are dominating the shelves on the hypermarkets. Now we know it's sold in Giant and Aeon. How about other supermarkets? Anyone checked it out yet? please kindly share.

Posted by DonJon > 2017-05-16 11:30 | Report Abuse

Nice to see many discuss it so likely the result may be jump higher. I think I saw one of the hardware warehouse stores also sell their furniture packed in boxes too.

Posted by nikicheong > 2017-05-16 12:44 | Report Abuse

Specter, how do you see 15% upside? It's better to have a range in mind, and take profit once the stock price has outrun the fundamentals. This stock could easily hit RM2.25 by end of next year.

Also, any idea how much more unexercised warrants remain? I have a feeling not much remain, so dilution will be less of a problem going forward.

Posted by Ezra > 2017-05-16 15:45 | Report Abuse

@nikki - I've just looked into the article in Investopedia, the explanation given by J.B. Maverickis quite insufficient. No extensive elaboration, no application, no backtesting. I think it is most likely written based from his personal observation or judgement.

Well, he did disclaim that a high price to book (P/B) ratio doesn't necessarily correspond to a high return on equity (ROE), but it does under ideal circumstances.

I think these paragraphs in particular though, is quite wrong. Let us deconstruct the theory.

"A high P/B ratio stock commonly has a correspondingly high ROE, since investors are inclined to pay higher multiples of book value for a stock that is showing them a good return."

- Wrong. In Bursa alone, there's shitton of companies with high P/B, this is because they have a lot of asset over the years, but they are not necessarily efficient, hence commanding a low ROE.
As an investor, your job is to buy undervalue stock and sell overvalue stock, when you pay higher multiplies of Book Value over a stock that is high ROE, you defeat the purpose of Margin of Safety.

"Companies with high growth rates are likely to have high P/B ratios. Divergence between the two measures, high P/B with a low ROE, can be a warning signal that shareholder equity is no longer increasing."

Companies with high growth rates are likely to have high P/B ratios? No, not really, that should be high P/E ratio, not P/B.
A company growth also does not necessarily stem from the growth of it's asset, only companies such as manufacturing does. Plus you have companies that are asset light, as I told you before. So the divergence will most likely be wrong.

End of the day, a theory is just a theory. Understanding it is more important than applying it.
His theory by itself, is not wrong, there is some correlation.
Just that he did not properly elaborate on which circumstances it is applicable, and which is not. It is only applicable in certain types of companies, and not all.

Posted by Ezra > 2017-05-16 15:48 | Report Abuse

Sorry for the long post, lol.

Posted by specter > 2017-05-16 15:56 | Report Abuse

My technical speculations have netted me ranging from 28%-54% returns in the past and I'm seeing an +15% share price upside which is a recovery & return to the norm of the uptrend highest high. On 24-Mar-2017 marked the start of a correction until the recent bottom price at RM 1.28 on 11-May-2017. The share price will be supported by the consistent dividends payout at each quarter.

Based on my understanding of the company's fundamentals, I believed the uptrend is intact and the correction is deemed to be healthy because all fundamental pointers indicate that the businesses of Hevea remain resilient going forward. Therefore I dared to accumulate a lot during the selldown in the past few days. Now watching the rebound in progress.

Up until the latest warrants exercises:
HEVEA: 537,740,990 shares @ RM 1.30 = RM 699,063,287 market cap (mother share)
HEVEA-WB: 30,685,674 shares @ 1.06 = RM 32,526,814.44 market cap (warrants)

The Yoong family exercised 9 millions warrants and Dato Loo & son exercised 1 million warrants on 07-March-2017. U can check back the historical data showing that there were huge purchases of warrants weeks before they announced the exercise date and also many consistent daily buying of warrants non-stop before and after the warrant exercises too.

Posted by specter > 2017-05-16 16:09 | Report Abuse

In the real commercial world, u shouldn't do things or follow the books. By doing that just simply limit yourself to certain levels of success only. Just look at the super successful people in the world, most of them did not even complete their education. That's why...use your brain and business sense. If u are still poor in your thirties-fifties then it's your own fault and don't blame other things or other people for your failure to succeed.

Posted by nikicheong > 2017-05-16 16:11 | Report Abuse

Ezra, P/BV should follow ROE, not the other way round. So yes Bursa has tons of terrible companies with high P/BVs and low ROEs...your job is to stay away from them. P/E ratio is not related to ROE in the way P/BV is.

I think you're not thinking properly. Companies with high growth rates have high ROEs and correspondingly high P/BVs. This is totally accurate. Look at Nestle, Dutch Lady and F&N. Look at their ROE and P/BV. The relationship is 1:1 when ROE is at 10% leading to P/BV of 1.0X. But it's an exponential relationship. As ROE hits 40% P/BV can be at 8X or more.

Go read up on it. Value investors don't care about P/E ratios. They are meaningless. They care more about ROE along with P/BV.

Posted by Yusof45 > 2017-05-16 16:14 | Report Abuse

u guys dont need to argue so much..this qr is going to be less than last qr based on common sense..so sell before it is too late

Posted by 10bagger10 > 2017-05-16 16:17 | Report Abuse

Yusof45 sifu, u expect how many eps? Write it down. So that we can comparw later.

Posted by Ezra > 2017-05-16 16:50 | Report Abuse

I disagree with you view that P/BV should follow ROE, I think they are two different components.
A well managed company does not necessarily purchase higher assets, it may due to internal restructuring, cost cutting, etc. Remember what is the composition of ROE again? NPM x AT x FL.

On contrary, ROE and P/E is connected. Think this way, because a company is efficiently managing a company, it generates high profit, thus command a higher valuation.

Companies with high growth rates have high ROEs and correspondingly high P/BVs. This is totally wrong. Amazon for one, is already enough to refute this. Similarly to other asset light companies.
Not sure if you missed it, for the examples you've given me such as Nestle, Dutch Lady and F&N as I wrote already, this theory only applies in manufacturing companies.

It's alright. Remember, as the investment adage goes: "Valuation is more of an art than a science". Different people has different strategy. No right or wrong.

Posted by nikicheong > 2017-05-16 16:55 | Report Abuse

Tech companies are very different, I won't get into that. Anyway I am comfortable enough in my knowledge that P/BV should follow ROE (assuming the ROE can be maintained at the higher level).

Posted by Ezra > 2017-05-16 16:56 | Report Abuse

Oh just to clarify, PE is still useful for dirty and quick valuation, otherwise we normally don't use it, but we don't completely shun it either.
Just because I've mention it doesn't mean I use it, rather it's because it's easier for others to understand, haha.

Posted by hng33 > 2017-05-16 16:59 | Report Abuse

Good closing :D)

Posted by specter > 2017-05-16 17:14 | Report Abuse

Yusof45, u don't have stocks don't talk cock.

Posted by SC > 2017-05-16 17:17 | Report Abuse

i don't see an issue in HEVEA, am buying for long term... ignore the buggers

Posted by nikicheong > 2017-05-16 17:21 | Report Abuse

Wow, haha. Got in at RM1.29 yesterday and now it's at RM1.33. Not bad. In for the long haul though. Hopefully strong Q1 and Q2 results.

@Yusof, surely Q12017 results will be below Q42016, YoY is more important. Can it beat Q12016? Hopefully yes. Beating Q22016 in the next quarter will be easier still.

Posted by nikicheong > 2017-05-16 17:45 | Report Abuse

Alas, while immediate quarter results are good, we should still view things in the longer term. Here's to hoping Hevea produces good results both in the near and far term.

Posted by 10bagger10 > 2017-05-16 17:50 | Report Abuse

Any one agree estimated eps 6?

Posted by ShareRich > 2017-05-16 19:04 | Report Abuse

Need to see tomorrow's price movement to confirm the trend reversal.Good luck everyone!

Posted by isupertrader > 2017-05-16 22:46 | Report Abuse

Like I say, this is one of a few management that can turn red into green. This is an A class management. Definitely going for long hold for this one.

Posted by specter > 2017-05-17 08:20 | Report Abuse

That is why I've told u to accumulate when it's still cheap and at bottom of the technical correction. Don't be like certain individuals who talk cocks but maybe secretly buying behind the scenes also lol.

Posted by specter > 2017-05-17 08:49 | Report Abuse

In the past, Hevea been doing B2B and in recent years it started B2C that sells directly to consumers even with its own online website. This resulted in the increase of its sales significantly for the past few quarters & we can expect more from the online sales more to come because it was just operational since last year. Strong brand name of Heveapac and KreaKids will become a more valuable assets to the company. The accounting & financial aspects of Hevea is superb and I just focus & observe their business executions especially the top-level business decision-making.

Saw this piece of online article today & thought of sharing with u guys:

https://www.weforum.org/agenda/2017/05/world-most-valuable-brands-google-apple-lego-nokia?utm_content=buffer4e484&utm_medium=social&utm_source=facebook.com&utm_campaign=buffer

In the latest financial year 2016, its 60% revenues derived from RTA while 40% still from particleboard. Its RTA division is serving two market segments in the RTA market categorically the affordable segment (Heveapac) and the high-end eco-friendly segment (KreaKids) mainly to Japan followed by Aus/EU.

I believe Hevea will grow & solidify itself into a more dominant furniture maker in the region, in which it's already is the largest RTA maker in Asia in terms of volumes and sales. Strong product brands presence and reputation (product quality & business management) build-up are the keys to enhance its sales.

Posted by specter > 2017-05-17 08:59 | Report Abuse

Moving away from being just a particleboard manufacturer is Hevea's greatest move since few years ago. This move distanced itself from being just a competing particleboard maker with its peers. It has since transformed itself into a reputable and one-of-a-kind ready-to-assemble (RTA) manufacturer especially in the high-end segment of low-formaldehyde kids furniture that are exported into high-income nations like Japan/EU/Aus that are more health-conscious. If u want to know more then please read all of their Annual and Quarterly reports.

Thought this might be interesting one as well:
https://howmuch.net/articles/most-valuable-brands-2017

Posted by DonJon > 2017-05-17 11:13 | Report Abuse

Rebound could be hinting good results due next week

Posted by cjlim > 2017-05-17 11:37 | Report Abuse

RTA production is expanding. Will become like IKEA soon.

Posted by ShareRich > 2017-05-17 12:22 | Report Abuse

Enough hard selling,let's wait and see!

Posted by nikicheong > 2017-05-17 13:45 | Report Abuse

So are Hevea RTA products kinda competing with IKEA stuff?

Posted by specter > 2017-05-17 14:47 | Report Abuse

Whatever quantity of shares they sold down must be bought back. They are losing the downward short-selling momentum because the expectation for Hevea's quarter result is high which is due next week or thereon.

Posted by specter > 2017-05-17 14:51 | Report Abuse

Hevea is the HOMEGROWN IKEA of Malaysia! U can compare their affordability but Hevea's particleboard-based RTA items are more sturdy due to higher quality in order to have a competitive advantage over Ikea. If u notice that Ikea's RTA products are lighter but have a shorter lifespan than what Hevea produced. I'm not sure if Ikea has any eco-friendly products particularly low formaldehyde particleboard-based materials. Anyone check on that?

Posted by cjlim > 2017-05-17 16:13 | Report Abuse

HEVEA product is using rubber wood as raw material. E0 quality.

Posted by Dylan Yong Hua Tai > 2017-05-17 18:37 | Report Abuse

bunny and salted fish gone.... sign for Hevea raise up...

Posted by nikicheong > 2017-05-17 20:37 | Report Abuse

Guys we are nearing the end of dilution, correct? Only around 30 million unconverted warrants left, right?

Posted by 10bagger10 > 2017-05-17 21:25 | Report Abuse

hevea=mini ikia?

Posted by Ezra > 2017-05-17 23:16 | Report Abuse

Some of the wood exporters has shown signs of recovery, will Hevea follows?
We do not know, but I think it's fair to be cautiously optimistic. I am bullish on Hevea.

Posted by specter > 2017-05-18 07:01 | Report Abuse

Hevea's businesses will outperform again this year...just watch how it will show u the sterling results. The 2 main brands namely Heveapac and KreaKids are doing very well in overseas and domestic markets as well. Get some real ground info if u can and you'll be able to verify what I said.

Posted by 10bagger10 > 2017-05-18 07:13 | Report Abuse

Ok i bought many, can someone enlighten will hevea will have higher profit margin because sapu upstream to downstream?

Posted by specter > 2017-05-18 07:17 | Report Abuse

U bought a truckload lorry of shares? lol

Posted by specter > 2017-05-18 07:18 | Report Abuse

Where is Icon8888 sifu? Hiding in plain sight?

Posted by 10bagger10 > 2017-05-18 08:43 | Report Abuse

Icon sifu is relaxing...

Posted by specter > 2017-05-18 10:25 | Report Abuse

FLBHD just did very well as announced yesterday with y-o-y +88%. Today stock of FLBHD took the lead followed by Hevea and Homeriz. What are the similarities of the trio? Double-digit profit margin growth! We'll see Hevea's results next week!

Posted by nich0las > 2017-05-18 10:46 | Report Abuse

BUY Mini IKEA