Commentary of Prospects for FY2018 Continued resilience in the EU and US economy augurs well for the longer term prospects of the panel board and furniture market. Log prices continue to remain elevated as log supply has yet to return to past norm levels but more favorable weather in Malaysia has improved the log supply situation in the first month of 2018 as compared to second half of 2017. While demand for panel boards and furniture remain intact, new plants have resulted in heightened competition. The Group foresees a challenging 2018 but will be in a better position to meet the challenges with full year contributions from the particle board plant and recommissioning of an MDF line whose refurbishment is expected to be completed by end first half of 2018. Several other MDF lines have seen retooling and upgrading works done in second half of 2017 which will improve the efficiency and quality of the Group’s products in 2018. If the log supply situation continue to improve and the Malaysian Ringgit stabilizes at current level vis-a-vis the United States Dollar, the Group expects to deliver a satisfactory result in 2018.
see how evergreen go because new Continued resilience in the EU and US economy augurs well for the longer term prospects of the panel board and furniture market.
Evergreen's earning is as bad as other wood based companies, i.e. Hevea, Latitude & Liihen, in Jan-Mar quarter. I suppose the result is expected in view of weaken USD and higher log cost. The positive point is its current stock price has reflected the poor earning in advance. Its PE is <10x now, so I suppose its stock price will not fall much on Wednesday.
1Q result is a bit disappointing if you compare with 4Q17 but is to be expected if you consider the forex level. If you compare EVG result with Hevea, I would say that E's result is a lot more resilient. This I attribute to their better Mgmt. This is not the first time one can see how E's Mgmt can react and respond to unfavourable mrkt situation better than H. Once pb price drop you can see H performance drop like a rock. They still have yet to resolve labor issues even though it has been 3 qtrs since they admit to labor shortage. Do u really need so long a time to hire more workers? Why doesn't E have Labor issues even though E has a bigger operation?
If compared to the Hevea and Mieco results, Evergreen proven is market leader in the industry... At current price ranges I will buy back despite earlier cutloss at 55 cents
Martin99 If you noticed, this qtr EVG has gain from disposal of PPE. From the 2017 annual report, there is asset held for sale which from description there, seems like the land in Masai which became vacant after they move the machines to their other plants. So while EVG has this extraordinary gain, they offset it with goodwill write off so the profit is not distorted by the big gain. Goodwill and deferred tax assets are ticking time bombs as you dont know when auditors will request for them to be written off. So it is a good move to get rid of these time bombs when there are extraordinary profits. After all, goodwill write off is non-cash but the disposal of asset is an incoming cash item. After this write off, you can see the goodwill is now much lower at RM9.6mil compared to RM19.6mil in 2015. Deferred tax asset on the balance sheet also shrunk a lot but if you read the notes in the 2017 annual report, there is actually a lot of deferred tax benefits not taken into the books. This means tax savings in future.
I've mentioned a couple times already but will repeat it again, EVG management is good at what they do compared to Hevea and Mieco.
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....
stevenwongg
411 posts
Posted by stevenwongg > 2018-05-16 10:58 | Report Abuse
will evergreen going further up?