The Daily Pulse of Bursa Malaysia

Evergreen poised to turn the corner, boosted by pick up in demand from the US and EU

Publish date: Mon, 10 Jun 2024, 08:34 AM
0 131
Daily Pulse is a blog that provides daily stock updates and insights on the Bursa Malaysia.

Follow us in telegram for more daily discussion

Evergreen Fibreboard Bhd saw some bullish momentum in its share price with no sign of it abating.

It is now trading close to its 52-week high of 38 sen seen in September last year.

The counter rose 33.3% over the past year to close at 36 sen on June 7.

It was trading at a low of 26 sen a year ago.

The stock will likely extend its upward trajectory towards the 38 sen and 42 sen region in the near term.

Investors were probably concerned over its loss making position as it posted a loss of RM33 million in FY23.

However, the wood manufacturer is anticipated to see a turnaround in the second half of this year.

According to HLIB, this will help the company return to the black in the full fiscal year 2024.

The research house expects Evergreen to post a net profit of RM10.5 million and RM19.5 million in FY25.

Going into the second half of the year, Evergreen’s return to profitability will be driven by a number of factors.

For one, the new capacity in the Indonesia MDF line will be coming online in 3Q24.

The increased capacity in the Indonesia MDF line can be absorbed by the local Indonesian and Middle Eastern markets.

A recovery in furniture demand from the US and EU will also be Evergreen’s growth catalyst.

Another key catalyst for rising demand could be the anticipated recovery in the US housing market in anticipation of a rate cut.

A meaningful rebound in the demand from US will be significant to local furniture players, as the US market accounted for around 49% of Malaysia’s wood furniture export.

Should this materialise, panel board makers like Evergreen will be among the first to benefit as Malaysian furniture manufacturers replenish their panel board inventories.

Evergreen focused on developing new markets by increasing exports of Ready-to-Assemble (RTA) furniture to Japan after facing a slowing furniture demand from the US and EU,

This strategic shift has yielded encouraging results, with exports to Japan now accounting for 20% of it’s RTA sales.

Given the stringent compliance standards in Japan, Evergreen’s successful penetration could pave the way for expanding its client base and product offerings, potentially including panel board exports to Japan in the future.

Investors should look at this counter, which looks more than capable to giving more upside to its shareholders in the near term as it turns the corner.

Related Stocks
Market Buzz
More articles on The Daily Pulse of Bursa Malaysia
Multiple catalysts to spur Sunway share price

Created by zaclim | Jul 25, 2024

Sunway is hitting the right notes given its exposure to rising property sector and booming data centre-related deals. Investors are also awaiting the spinoff of its medical arm.

RCE Capital in the spotlight as it might surpass its previous high

Created by zaclim | Jul 24, 2024

RCECAP, non-bank financial institution, might see further upside on expectations of a hike in civil servants’ salaries. With a proposed bonus share issue, this might propel the counter even higher

Laser vision on Optimax as it looks appealing

Created by zaclim | Jul 22, 2024

Optimax Holdings Bhd has set its sights on an upturn in its result after a less than desirable year end This augurs well for the company and investors may want a piece of the boom

Tasco gains steady upward momentum despite poorer 4Q numbers

Created by zaclim | Jul 22, 2024

Total logistics solutions provider has been hit by freight rates that fell to pre-pandemic levels. Hopes are high that the company will recover and trend higher.

Teo Seng looks poised for further uptrend

Created by zaclim | Jul 19, 2024

Integrated layer farming company Teo Seng Capital Bhd is garnering much attention as it has almost doubled in terms of share price in the past year. Shold investors continue to hold on to it?

Super interest in Superlon with attractive entry point

Created by zaclim | Jul 18, 2024

Price rose to a 52-week high of RM1.45 as it posted more than 3-fold increase in its net profit 4QFY24. Now that the counter has trended lower, indicate a good time to consider investing in Superlon

Banking on a big gain from Unisem but not immediate

Created by zaclim | Jul 16, 2024

Unisem (M) Bhd is slowly but surely regaining its lustre. All things are moving towards better days for the manufacturer of semiconductor devices.

More upside for Tex Cycle as it goes on M&A sprint

Created by zaclim | Jul 15, 2024

Texcycle has been on the upcycle in terms of share price, touching a record high of RM1.49. It has lost some ground since its high but the counter is trending out recently.

ATA IMS sees bright light as it surges past 2-year high

Created by zaclim | Jul 15, 2024

Electronic manufacturing services provider ATA IMS Bhd has been trading higher in the last couple of weeks and looks to be able to sustain its upward momentum. Is it still time for investors to enter?

Kobay saw poorer 3QFY24 results but saw positive share price momentum

Created by zaclim | Jul 11, 2024

Kobay Technology Bhd is seeing upward traction again after trending lower since touching a year high of RM2.58. Can it surpass its recent high?

Be the first to like this. Showing 0 of 0 comments

Post a Comment