Have been holding and whitnessed the 1.78high and 1.15low for the past year. TP is Rm2.0++. Not gonna sell anything below that. Learnt from my mistake in pentamaster.Just because the price stay stagnant for a long while and act smart to sell and move money elsewhere,miss the huge move from 0.70 to Rm3.70! What a chance to make Rm120k just from Rm30k investment capital by buying and holding!
Posted by CKCS > Jul 3, 2017 08:45 AM | Report Abuse
The most at risks are those manufacturers such as Evergreen which have production plants outside of Malaysia since NO WOOD LOG SUPPLIES WILL EVER COME FROM MALAYSIA AS LONG THE EXPORT BAN PERSISTS. This inherently caused those production plants located in THAILAND, INDONESIA, VIETNAM and other foreign locations to have LOST ANOTHER IMPORT LIFELINE OF WOOD LOG SUPPLY FROM MALAYSIA. This is an OBVIOUS and IMPACTFUL RISK to its OPERATIONAL PRODUCTIONS.
Agree, but am not going to sell if HEVEA have continuously increase their profit even share price hike to 2.00... I have the same feeling like you as I'd sold some of OKA, ARANK and Insas when their share price stagnant for last time...
Posted by Lcube > Jul 3, 2017 10:11 AM | Report Abuse
Have been holding and whitnessed the 1.78high and 1.15low for the past year. TP is Rm2.0++. Not gonna sell anything below that. Learnt from my mistake in pentamaster.Just because the price stay stagnant for a long while and act smart to sell and move money elsewhere,miss the huge move from 0.70 to Rm3.70! What a chance to make Rm120k just from Rm30k investment capital by buying and holding!
Hevea's has diversified already with up and running businesses. Cannot be compared to those just started. The profits keep improving each quarter means it will deliver key results in tandem with the stock. Congratulations to those smart who bought at low.
KUALA LUMPUR: The government’s ban on the export of rubberwood effective this month would help to lift a cap on local furniture makers’ earnings growth. This is simply because with more supply of rubberwood moving forward, manufacturers would be able to meet their orders faster.
Furniture makers have been facing longer lead time, no thanks to rubberwood and foreign labour shortages. Analysts expect the export ban would at least ease one problem that the furniture industry is currently suffering.
For that, KAF Investment Funds Bhd chief investment officer Gan Kong Yik sees more upside potential in furniture stocks as he believes their current share prices have yet to factor in the latest news.
According to him, market sentiment has turned cautious amid pressure on the US market. “It would take some time for the furniture counters to digest this news,” said Gan. “I think furniture players like Poh Huat [Resources Holdings Bhd] and HeveaBoard [Bhd] should benefit from the policy; [their] valuation is cheap and [they] pay good dividends,” he said.
Poh Huat closed unchanged at RM1.95 last Friday, with a market capitalisation of RM418.73 million. The stock has gained 9.55% year-to-date (YTD) from RM1.78 at the start of the year. Meanwhile, HeveaBoard closed three sen or 2.17% higher at RM1.41 last week, bringing a market capitalisation of RM759.8 million. YTD, HeveaBoard’s share price has declined by 6% from RM1.50 on Jan 3 this year.
Gan said the ban helps the industry to address the raw material supply shortage and ease the cost pressure on rubberwood procurement.
Hong Leong Investment Bank Bhd research head Sia Ket Ee views that earnings prospects of wood-based manufacturing players remain bright in the second half of the year, underpinned mainly by continued weakness in the ringgit and lower raw material costs.
“All in all, we opine that the latest development is positive for wood-based manufacturers in Malaysia, as the ban on rubberwood will alleviate [the] supply shortage of rubberwood in the country, hence easing the raw material cost pressure,” he wrote in his latest research note.
A bulk of the furniture makers’ earnings are denominated in US dollars and the new export ban of rubberwood will now increase domestic supply.
Apart from Evergreen Fibreboard Bhd, Sia is also upbeat about Homeritz Corp Bhd as the company is in expansion mode which would possibly mean stronger future earnings growth.
“We believe that [the expected] sustained US dollar strength will provide a favourable environment for Homeritz to mitigate rising costs of doing business,” he said.
Sia has a target price of RM1.05 for Evergreen and RM1.18 for Homeritz. He asserted a “buy” call for both counters.
Last Friday, Evergreen closed unchanged at 84 sen, valuing it at RM710.67 million, while Homeritz settled 1.5 sen or 1.64% higher at 93 sen, giving it a market capitalisation of RM277.51 million.
Minister in the Prime Minister’s Department Datuk Seri Dr Wee Ka Siong last week announced that the government had decided to ban rubberwood exports effective Saturday to ensure an adequate supply of the raw material for the local furniture industry.
Wee was quoted by the media as saying that Malaysia’s rubberwood exports were estimated to be worth up to RM300 million a year compared with the furniture exports of RM9.5 billion annually, hence the ban is important to ensure priority be given to the local furniture industry.
TA Securities senior research analyst Ooi Beng Hooi concurred, and explained that there were few main difficulties faced by wood-based furniture makers in sourcing rubber logs in the first quarter of 2017, compared to a year ago.
“Firstly, the abnormal weather at end-2016 to [the] first quarter of 2017 deterred the progress of lumbering rubber logs, which in turn affected supply; secondly, rubber prices were higher at end-2016, so estate owners generally saw little incentive to lumber rubber trees and preferred to continue their tapping activities,” he said.
Other than HeveaBoard, Ooi said counters like Jaycorp Bhd, Lii Hen Industries Bhd, Latitude Tree Holdings Bhd and Evergreen are counters that would potentially benefit from the new policy.
Another analyst, who declined to be named, mentioned that the cut in the government grant for replanting rubber trees also affected the supply earlier this year.
“We understand that there was a cut in government grant. Naturally, this would also be part of the reason for [the] supply shortage,” he explained.
In the first parliamentary meeting in March this year, Plantation Industries and Commodities Minister Datuk Mah Siew Keong told opposition lawmaker Datuk Ngeh Koo Ham (DAP-Beruas) that the government’s replanting grant for rubber and oil palm smallholders will be reduced to RM540 million or RM108 million a year under the 11th Malaysia Plan (2016 to 2020).
Under the 10th Malaysia Plan (2011 to 2015), the grants allocated RM1 billion in total or an average of RM200 m
I do not think the rubberwood export ban could have a big impact on earnings but it just ensure a steadier and better supply to local makers hence that eases the bidding price for those raw materials and availability. It's still comes down to the management's ability to manage production costs through improved operational and production techniques. Production efficiency tweaks is the simplest form of profit margins improvement hence increased profitability even with the same amount of revenues as before. Logistics also may affect its overall costs but Hevea has solved it by purchasing the land for expansion next to its current factory in seremban for expansion. I've observed these 2 main efforts by the management based on my swot analysis which have increased its profit margins considerably.
Moving forward, the most anticipated catalyst for Hevea will be the "gourmet fungi" venture as indicated by the management in the recent AGM which is able to command above 40% profit margins. Please take note that the gourmet fungi venture will be a comprehensive business-to-consumer (B2C) chain, which is good so that Hevea is not susceptible to any disruptions in this entire venture chain. This will be own-brand-manufacturer (OBM) for Hevea. This will add to its branding stable of the existing Heveapac/Bocowood and KreaKids, all commanding double-digit profit margins.
The principal activity of HEVEAGRO is the cultivation of gourmet fungi, packing, distribution and trading of all kind of edible fungi and agro products.
Hevea will be spending RM 48m on CAPEX this year 2017. The breakdown is as the following:
- RM 20m will be used in the RTA sector to build a new factory and to acquire new machineries for the 7.7 acre industrial land that we had just acquired for RM13.5 million. - RM 13.5m to pay for the purchase of 7.7 acres land for expansion - RM 10.5m to build new climate controlled gourmet fungi cultivation facility - RM 4m will be allocated for further upgrading works for our particleboard sector.
U didn't get the memo meh? Trump & Republican gangs supplying weapons to Saudi gangs mah. Starts loh! What else not ready? US will swallow Qatar from within but Qatar backers won't allow it. This is no black hawk down loh....
U didn't get the memo meh? Trump & Republican gangs supplying weapons to Saudi gangs mah. Starts loh! What else not ready? US will swallow Qatar from within but Qatar backers won't allow it. This is no black hawk down loh....
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
free2invest
1,748 posts
Posted by free2invest > 2017-07-03 09:24 | Report Abuse
Wow! 1.44 now