A good turnaround and with RM115m net cash, shareholders expect a good final dividend. In question is whether they can expect sustained recovery in profits. Assuming in 2022, the company makes RM29m net profits a year, RM10m capex, and pays RM4m income tax, it will generate RM44m or RM0.077 additional cash a share. This makes the current valuation attractive.
The controlling shareholders again sold more than bought the company’s shares, even at around 45sen, a lowish price level. The company has stopped paying dividends for 3 quarters by now, although it has RM115m net cash. The management asked that shareholders invest in this company for the long run, but have been punishing them with both zero dividend and collapse in the company’s market capitalisation. What kind of signals the controlling shareholders are giving to the market? They are essentially asking the shareholders to bear the pain or otherwise sell off their shares.
their buy sell amount is insignificant to their holdings, both the siblings takes a million in salary+ benefit. buy selling few hundred thousands shares with movement of 10 cents is just a 100k up down, no big deal.
Most company dont pay dividend during pandemic unless they are pro-covid.
target price of 63 sen pegged to a price-to-book ratio (P/B) multiple of 0.85 times based on FY22 book value per share (BVPS) of 72 sen.
“As the raw material supply has returned to a healthy level, we anticipate that HeveaBoard should see sequential improvement in 2QFY22 (second quarter of FY22). This improvement is further bolstered by the increasing particleboard export sales to the Japanese market that fetch a better margin compared to other export markets.
“While we are cognizant that glue cost is increasing following the oil price hike, we understand that the price level is still below its peak in December 2021,” he added.
At 10.31am on Wednesday, HeveaBoard shares gained one sen or 1.9% to 53.5 sen, giving the particleboard manufacturer a market capitalisation of RM300.93 million.
Heveaboard is set to resume its uptrend movement as it climbed above the recent high of MYR0.565 on improved trading volume – marking a new YTD high, after breaching above the MYR0.565 immediate resistance on stronger volume – printing a “higher high” bullish pattern. The uptrend which started on 21 Mar may persist until the stock reaches MYR0.60, before marking the MYR0.64 resistance. Conversely, the stock may reverse direction if it falls below the MYR0.54 support, as it forms a “lower low” bearish structure.
The company has RM120m net cash; take that out from the current market capitalisation, the company is selling for RM130m only. One-year depreciation charge is RM30m, which more than covers for all sorts of capex the company wants to do. So, the company can actually declare all its profits as dividend without affecting its net cash balance of RM120m. It should be able to make at least 3sen net profit per share a year. Potential dividend yield will be very attractive.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....