Homeritz’s 3QFY23 headline net profit fell 44.7% YoY to RM6.2m, primarily attributed to a decline in sales volume in Asia and Malaysia regions. After stripping out non-core items, Homeritz’s core net profit came in at RM5.2m. Cumulative 9MFY23 results were within both our and consensus estimates at 80% and 74% respectively. We understand that the group has been actively participating in KL and China furniture exhibitions, which should help in securing orders from new and existing clients. Although this is expected to contribute positively to the group’s bottomline, impact is not likely to be significant, in our view. The overall furniture demand remains sluggish in the near term due to the current high interest rate environment. All told, we keep our earnings forecast for FY23-25F unchanged and reiterate our Neutral call on Homeritz and remain our TP of RM0.48 based on a 9x PE multiple.
Source: PublicInvest Research - 31 Jul 2023
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