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Author: MalaccaSecurities   |   Latest post: Fri, 15 Jan 2021, 10:44 AM

 

Poh Huat Resources Holdings Bhd - Benefitting From US-China Trade Diversion

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  • Operates at a production space in excess of 3.5m sqf in both Malaysia and Vietnam with products sold to over 60 countries in 5 continents across the globe.
  • A one-stop furniture manufacturer; well equipped to capitalise on the stronger demand from the US-China trade diversion.
  • Demand to remain stable on the recovery in US housing starts data that is currently near pre-Covid19 levels, coupled with the rising adoption of work from home.
  • Technically, price has formed a flag-formation breakout above RM1.42 which may propel share price higher towards the next resistances at RM1.59-RM1.70 with long term target at RM1.80.

Trading Catalyst

  • Poh Huat Resources Bhd (Poh Huat) operates at a production space in excess of 3.5m sqf in both Malaysia (1.5m sqf) and Vietnam (2.0m sqf), supported by approximately 6,500 staff force within the group. Poh Huat products are marketed under the brand name of AT Office System and AT Home System and sold to over 60 countries in 5 continents across the globe.
  • We like Poh Huat for their position as one of the leading furniture manufacturer, well regarded as a one-stop furniture manufacturer with the ability to manufacture products for living room, bedroom, dining room, guest room, or office. We reckon that Poh Huat is well equipped to capitalise on the stronger demand from the US China trade diversion.
  • We expect demand to remain stable premised to the recovery in US housing starts data that is currently near pre-Covid19 levels. At the same time, the rising adoption of work from home (part of the measure to reduce human contact) may continue to give rise in demand over the foreseeable future. We also note that prospective dividends are attractive at 4.1-4.6% for FY20f and FY21f, respectively.

Technical Outlook

  • Technically, share price is on an uptrend formation since mid-August 2020. Price has recently staged a mild pullback towards the daily EMA20 level before forming a flag-formation breakout above RM1.42. The aforementioned move may power price higher towards the next resistances at RM1.59-RM1.70 with long term target at RM1.80. Support is pegged at RM1.37 and cut loss is located at RM1.36.

Source: Mplus Research - 28 Sept 2020

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Labels: POHUAT

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Chart Stock Name Last Change Volume 
POHUAT 1.62 +0.01 (0.62%) 251,400 

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