• TSH Resources announced that a fire has occurred at Ekowood International’s factory at Gopeng, Perak at 7.50pm on 1 June 2020.
• TSH said that the estimated loss has yet to be ascertained.

• However, all the assets at the factory are adequately insured. Adequate insurance coverage has been taken for consequential business loss.

• Ekowood produces wood flooring products. Most of the wood flooring products are exported to the EU, China, Australia and New Zealand. Ekowood recorded a marginal loss in FY19.

• This is the second time that there has been a fire at Ekowood’s factory.

• There was a fire at Ekowood’s factory in Gopeng in February 2019. TSH recognised insurance claims for the fire in FY19.

• TSH recorded insurance claims of RM41.7mil in respect of the fire in FY19. Inventory writeoffs amounted to RM18.6mil while inventory write-downs amounted to RM4.7mil.

• We maintain SELL on TSH Resources with a fair value of RM0.80/share.

Source: AmInvest Research - 3 Jun 2020