EVERGREEN 2022 first 2 quarters already earned 4.24sen, whole year will earn close to 10sen due to stronger USD / MYR rate. Do you think it is worth only RM0.40? Come on, apparently some big crocodiles are pressing the price down to collect. Just assume PE=8, easily the price can go up to 80sen or more!
from Q2 report: The Group’s revenue for the quarter ended 30 June 2022 increased by 54.8% or RM116.80 million to RM330.11 million from RM213.31 million recorded in the preceding year corresponding quarter. The increase in revenue was mainly contributed from higher average selling price and sales volume from all major category of products. Profit before tax for the quarter ended 30 June 2022 increased by RM18.55 million to RM23.13 million from RM4.58 million recorded in the corresponding quarter of the preceding year. Despite higher raw material cost, the higher profit was mainly contributed from higher margin resulted from higher average selling prices and higher foreign exchange gain.
the Group has achieved positive and improved results in the first half of 2022, compared to the same period in 2021. With our diversified base of operations in Malaysia, Thailand and Indonesia as well as having multiple income streams from raw boards to downstream, the Group manages to draw on the strengths of each country and market segment to mitigate the shortcomings. The Group is also seeing the benefits from expanding its downstream activities and from past investment in automation and cost restructuring which has resulted in more contributions from downstream as well as a leaner cost structure. The improvement in market demand for furniture has also been capitalized by the Group with improvement in average selling prices
It’s upstream biz will decline due to decreasing timber prices. It’s downstream biz is much smaller and should mitigate the negative situation a bit. Don’t look at past results as share market is forward looking.
hi sense maker, Evergreen is now growing its downstream (knock-down furniture) business in huge pace and also producing more higher grade / enhanced wood product. they are not only producing pure MDF or plywood, but also enhanced wood product which garners higher profit margin.
In bear market, investor will dump their stocks regardless of any price even though they are good stocks. It appears that fear outweighs greed currently.
Lumber prices crashed from usd14000 in May 2023 to usd400 now in US. Shareholders panicked and threw off Evergreen. Not sure how well the company can manage its average selling price especially in its upstream biz.
Hi Sense Maker, I thought with lumber prices crashing down it is good news for Evergreen since their log supply cost will be lower and therefore production cost will be lower ? Could you please enlighten me a bit. Thanks
A few possibilities: 1) Biz orders, sales and average selling prices plunged. 2) Management made a big mistake like holding too much inventory when average selling prices are plunging or allowing receivables to shoot up. These tighten cash flow and increase future losses. 3) Public free float is very high in this company. 500m plus shares are speculative in nature and panicked easily when global asset sell off occurred. Fundamentally, the company remains sound. 4) A fraud has occurred but this is unlikely as the company made no public announcement in that respect.
Insiders would sell first as usual if there’s anything untoward that already happened . Outsider Shareholders can only hope the sell off in the company is only due to factor 3). Let’s see.
Sense Maker, thanks for your in-depth and thoughtful analysis. Yes, overall market sentiment is quite bad and fear outweighs greed in the current hostile climate. No one dares to buy in a big way as a recession for sure will set in/ already set in some countries like the UK. Demand for Evergreen's products will definitely be affected. Therefore fair value will no longer be RM0.8 and will be adjusted downward.
Two days rebound and now selling pressure again!. I think with US in recession, demand for furniture ( optional item and can be defferred) will be affected. Evergreen sales will be affected accordingly. HLI have target of RM0.61. May be the actual value could be much lower. It is anybody guess
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Posted by gogogolee > 2022-06-25 08:52 | Report Abuse
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