Posted by specter > 2017-07-12 14:00 | Report Abuse

Stockraider, your childish actions are showing your weak personality. Don't be so jealous with HeveaBoard. Buy Hevea shares lah! (LoL! someone secretly buying also) Time and tide wait for no man. Our growth prospects are very bright with solid earnings growth. If u buy Hevea shares, you'll receive dividends every quarter since our balance sheet is very healthy and solid.

Posted by specter > 2017-07-12 14:01 | Report Abuse

mr00183, he just failed in his evergrn u go there u can see his funny acts lol

Posted by mr00183 > 2017-07-12 14:33 | Report Abuse

Specter, just see hevea new management appointed in 2012, they turned around the company ever since . What nonsense raider talking about

Posted by mr00183 > 2017-07-12 14:36 | Report Abuse

Its very simple, every action must be a reaction. If you talk and make judgements about company whther bad or good, there always be a motive behind your move.

If you dont have any intention than why talk cock in the first place

Posted by specter > 2017-07-12 14:40 | Report Abuse

Nvm lah, he's just jealous after reading this statement by MD Yoong Hau Chun himself:

"Group managing director Yoong Hau Chun says profit margins from the mushroom cultivation will be better than its core business of manufacturing particleboards and ready-to-assemble (RTA) products. This [earnings margin] is what prompted us to look into the new business."

It's an excerpt from the latest interview in FocusM

Posted by specter > 2017-07-12 14:50 | Report Abuse

HeveaBoard enters into mushroom venture

• The company says the new business has better earnings margins compared to making particleboards and ready-to-assemble products

• It wants to grow top and bottom-line rather than volume

• Limited raw material supply is hampering any expansion in production


PARTICLEBOARD manufacturer, HeveaBoardBhd’s move to cultivate gourmet fungi (King Oyster mushroom) has raised investors’ eyebrows as it is venturing into an “unrelated” business.

However, group managing director Yoong Hau Chun says profit margins from the mushroom cultivation will be better than its core business of manufacturing particleboards and ready-to-assemble (RTA) products.

“This [earnings margin] is what prompted us to look into the new business.

“The project is divided into three phases. At the moment,we are only in the first phase. If things are encouraging and we see growth prospects, we are able to triple capacity.

“The business plan [of mush-room cultivation] seems to point towards this direction and maybe something quite encouraging.

“The return on investmentis rather short [in terms of pay-back period] and the margin is impressive on paper. This is why we decided to go into it,” Yoong tells FocusM.

To date, the Japanese Industrial Standards certified particleboard manufacturer has invested about RM10.5 milion equipment to cultivate the mushroom.

Yoong says the new venture relates to HeveaBoard’s core business to a certain extent.

He says HeveaBoard produces up to 100 tonnes per day of low-quality raw materials, which are organic compounds that are usually sold to boiler users at a discount.

“We have been thinking what to do with this low-quality raw material. Actually, there are a few uses for it, one of which is to cultivate the mushroom,” Yoong says.

Despite not having prior experience and knowledge in mushroom cultivation, he saysHeveaBoard has done research on it and found that no one in the country is growing the King Oyster mushroom.

“We thought it will be good because there is a market here, and we can utilise our waste product.

“Most importantly, we have a group of people that are already in mushroom cultivation activities, although it’s not the same fungi.

“Still, the technique is more or less the same, and we have purchased the knowledge transfer from China.

“In fact, our people have gone to China for the relevant training. I think it should be fine, it is something we should be able to master,” Yoong says.


Higher margin products

As it is, the company has been moving towards producing higher margin products. For example, it ceased production of its E2 grade particleboard, which was its bread and butter product, to focus on higher grade ones such as E1, E0 and super E0 grade particleboards.

Particleboard is classified into various grades, with the lowest being E3, and the highest super E0.

A lower grade particleboard producers higher formaldehyde levels, has weaker physical strength and offers lower profit margins.

The E0 and super E0 grade particleboard make up the bulk of HeveaBoard’s total production of 400,000 cubic meters a year while E1 grade accounts for about 15%.

HeveaBoard’s E0 grade particleboard is exported mainly to China, and the super E0 grade to Japan.

According to reports, HeveaBoard’s exports to China account for 43.85%, Japan (12.28%), South Korea (11.74%) and India (10.56%), while local sales accounted for 13.36% of the total.

For its RTA products, the main importers are Japan (62.46%), Europe (11.45%), Australia (11.86%) and the US (2.69%).

For Q1 FY17 ended March 31, HeveaBoard’s net profit increased 24.87% to RM25.31 mil from RM20.26 mil a year earlier, on the back of improved revenue of RM158.65 mil from RM145.91 mil previously.

Its particleboard segment reported a pre-tax profit margin of 20.11%, while the RTA segment recorded 17.75%.

Yoong attributes the better Q1 result to the higher average selling price of its products.

He says towards the end of last year, demand, especially from China, increased, enabling it to raise its selling price progressively.

Despite the improved Q1 profits, Yoong says HeveaBoard’s results were slightly dampened by the increase in raw material costs.

He says the price of rubberwood, for instance, increased due to the wet weather and higher latex prices. This led to a lower supply. Moving forward, Yoong expects the price of rubberwood to stabilise.

“I think it will not actually go up any further as the price is already high. We have to see if there is any room for future reduction. But at the moment, the raw material price is still high,” he says.

HeveaBoard, he says, has no intention to increase its current capacity. “We are not expanding capacity in the existing business because we have decided to upgrade and work towards the elevation of quality rather than volume.”

Posted by specter > 2017-07-12 14:50 | Report Abuse

He says in the event HeveaBoard expands its production capacity, it will be in a difficult position due to the limited raw material supply.

“If you analyse the first quarter results of most of our peers, they will talk about the shortage of rubberwood, and that they have actually reduced production,” Yoong says.


Rawmaterial shortages

To address the possibility of raw material shortages, Yoong says the company recently invested RM4 mil in cleaning equipment to expand its raw materials and product ranges by using lower quality materials.

HeveaBoard is believed to be the first in Malaysia to invest in such cleaning equipment.

“We think the best way is still to make sure we have enough raw materials, just like how we invested in cleaning equipment.This will further improve profitability as well.

“If you put up another production line, the question is where the raw materials are going to come from?“

This is why we want to fur-ther improve and upgrade the line for quality and differentiate ourselves so that our selling point can be even higher.

“We grow our top and bottom-line from this aspect rather than volume,” Yoong says.

For FY17, HeveaBoard allocated RM48 mil for capital expenditure, of which RM10.5mil is allocated for the mushroom cultivation business, RM4 mil for particleboard upgrading works, and RM20 mil to construct and acquire RTA equipment.

On Jan 11, HeveaBoard announced the acquisition of 3.12 ha in Negeri Sembilan for RM13.46 mil to house its new RTA plant.

Yoong says the expansion of the RTA division is mainly to cater to the Japanese market.

While some shareholders say HeveaBoard’s expansion is prudent, Yoong believes the capex allocated this year shows it is aggressive in expanding, especially with the construction of its new RTA factory.

Posted by specter > 2017-07-12 15:00 | Report Abuse

I post the entire article from FocusMalaysia newspaper here at above divided in 2 parts so u don't have to download the document. Hope that makes it easier for others to read it.

Btw, it's on the Weekly Issue 240, July 8-14, 2017.

Posted by carilembu > 2017-07-12 15:08 | Report Abuse

Specter, thanks for the informative article.

Posted by Avangelice > 2017-07-12 15:38 | Report Abuse

I went into the counter after specter's post. thank you. God be with us

Posted by nikicheong > 2017-07-12 15:53 | Report Abuse

Walao eh...some people ahh....

Posted by shortinvestor77 > 2017-07-12 17:17 | Report Abuse

Once mushroom plantation is successful, hevea will go into cane food business. Do you know how much a mushroom cane sold in market?

Posted by specter > 2017-07-12 17:32 | Report Abuse

King Oyster Mushroom
https://en.wikipedia.org/wiki/Pleurotus_eryngii

Better don't argue with stockraider about mushroom since he has mushroom phobia lol

Posted by shortinvestor77 > 2017-07-12 20:37 | Report Abuse

I eat King Oyster Mushrooms. Small package cost me around RM3.50. Family cut it into long pieces, together with garlic and better to fry. Very nice!

Posted by specter > 2017-07-13 11:03 | Report Abuse

Demand picking up!

Posted by flytothemoon > 2017-07-13 11:05 | Report Abuse

going up, share price will tell the story

Posted by nikicheong > 2017-07-13 11:05 | Report Abuse

WTF buy rate at 94% with 12,500 lots done!! I have rarely seen this except in cases where there is very positive newsflow!

Posted by specter > 2017-07-13 11:27 | Report Abuse

The return of the King! King Oyster Mushroom that is!
https://forestfungi.com.au/blogs/forest-fungi/91372614-return-of-the-king-growing-king-oyster-mushrooms-at-home

Posted by nich0las > 2017-07-13 11:42 | Report Abuse

Eh, now seldom saw h'ng come here buy/sell. Wonder he still Contra-ing or not?

Posted by Farge168 > 2017-07-13 11:44 | Report Abuse

Slowly but surely moving towards 1.80,cheers guys!

Posted by Fabien Extraordinaire > 2017-07-13 11:56 | Report Abuse

Read a lot of comments regarding the new venture. To me, i see it as neutral - minimal risk to their core business profitability and i dont expect to see meaningful contribution top and bottom line in the near future. Hold on to your shares just for the prospect of higher profitability from their furniture business, riding on improvement in the global economy and high demand for furniture.

Posted by yfchong > 2017-07-13 13:46 | Report Abuse

relax have a kit kat

Posted by yfchong > 2017-07-13 13:49 | Report Abuse

i have not exposed to share limit up.... may be once... limit down sudah kena... once upon a time.... who remembers shanghai chung kee..

Posted by cjlim > 2017-07-13 16:13 | Report Abuse

I very miss Mr Robert.

Posted by nikicheong > 2017-07-13 16:57 | Report Abuse

That buy queue is so thin...worries me! Sell queue pulak so strong...

Posted by flytothemoon > 2017-07-13 17:14 | Report Abuse

ppl wanna buy wont queue to buy , ppl wanna sell also wont queue to sell, where got so polite?

Posted by free2invest > 2017-07-13 17:17 | Report Abuse

Why stockraider didn't come here to throw toxic today? We need his free advertisements for Heaveboard. Hahaha

Posted by buckbunny > 2017-07-13 18:45 | Report Abuse

buy MLab better lar.

Posted by LCKS > 2017-07-13 19:03 | Report Abuse

Fabien, agreed to your comment.

Posted by specter > 2017-07-13 19:41 | Report Abuse

It's totally no problem at all. It's just Hevea's mushroom business commands over 40% profit margin while particleboard & RTA both command stable 16-20% profit margins. These are very healthy & good profit margins that not many companies are able to achieve & maintain but it's not for everyone.

Maybe Fabien is an excellent CEO candidate than Hevea's CEO who actually brought superb returns to Hevea shareholders & succeeded the turnaround business plans implemented back in few years ago despite many baseless accusations. So again time has truly shown us who is really able to do it successfully.

Also maybe Fabien can show us some real verifiable proof if he has some real world economic/business senses. Hevea's new mushroom venture with over 40% profit margin is too little small for him.

Posted by nikicheong > 2017-07-13 22:27 | Report Abuse

Specter I like your positive attitude, but please be sensible. 40% net margins are ridiculous. It's most probably not going to be achieved anytime soon. Be happy with a 10% net margin in the first few years.

As an investor, you should dissect management views carefully. They're obviously going to sell you the best version of their vision...where in reality the targets usually fall short.

I'm a Hevea investor, but I'm well grounded and don't believe such baseless numbers.

Posted by flytothemoon > 2017-07-13 23:08 | Report Abuse

as far as i concerned, margin for mushroom is high, but risk also high, if not manage nicely, all the mushroom will die, so 40% is possible

Posted by specter > 2017-07-14 06:44 | Report Abuse

nikicheong, the management and directors mentioned the profit margin is over 40% for its new mushroom venture during recent AGM in Seremban. Another puzzle pieces of information u can read from MD Yoong Hau Chun's own words in recent interview article in FocusMalaysia newspaper too:

“The return on investment is rather short [in terms of pay-back period] and the margin is impressive on paper. This is why we decided to go into it,” Yoong tells FocusM.

"...group managing director Yoong Hau Chun says profit margins from the mushroom cultivation will be better than its core business of manufacturing particleboards and ready-to-assemble (RTA) products."

Read the second statement above from FocusM. Just as we all know Hevea's profit margins for particleboards and RTA ranging 16-20% averagely so it tells u already in the man's own words that the new mushroom venture is exceeding 20% for sure.

Posted by specter > 2017-07-14 06:47 | Report Abuse

I've posted the entire interview article from FocusM earlier above. It's better to read well in order to understand the project further but I've already knew Hevea's new mushroom venture is a "large scale" one based on the invested amount because I was involved in other greenhouse projects before. Also the reason it's expensive because it's a "climate-controlled fungi cultivation facility". You see that, MD Yoong had mentioned the new mushroom venture is divided into 3 phases and so far this year, the company had "invested" RM 10.5 millions in stage 1 only. Read the following statements from his own words as well:

“The project is divided into three phases. At the moment, we are only in the first phase. If things are encouraging and we see growth prospects, we are able to triple capacity. The business plan [of mushroom cultivation] seems to point towards this direction and maybe something quite encouraging."

Posted by mr00183 > 2017-07-14 10:03 | Report Abuse

Specter while i admire your enthusiasm and optimism, its safer to judge them based on what they have done, not on what they say, not to say i dont believe the management words, but anything can happen to a forecast.

Posted by buckbunny > 2017-07-14 11:37 | Report Abuse

good time to sell jump ship..

Posted by shortinvestor77 > 2017-07-14 13:49 | Report Abuse

Good time to invest more. High margin profit.

Posted by divhunter > 2017-07-14 14:06 | Report Abuse

yeah i follow bunny advice to sell....happy now?

ok now gonna cancel my order coz no taker @1.99

Posted by specter > 2017-07-14 14:08 | Report Abuse

mr00183, by the time when u are able to verify what they have done later, the stock will have appreciated to another value levels. The company "invested" RM 10.5 millions is not a small sum and that is for phase 1 only. With determination and financial commitments like that, rest assured it will propel Hevea's earnings higher than the average norms. I've never "heard" or "seen" any mushroom cultivation projects that failed before be it small, medium or large scales. I'm trying to be realistic most of the time as well but I'm seeing the rewards weighing higher than the imminent risks so I'm giving a full force to go ahead.

Posted by shortinvestor77 > 2017-07-14 17:20 | Report Abuse

Go to super/hyper market find out the price of a canned food of King Oyster Mushroom. Hevea's market is Asean.

Posted by yfchong > 2017-07-15 15:59 | Report Abuse

relax.... kit kat pop corn time

Posted by Andrewhlc > 2017-07-17 09:26 | Report Abuse

time to fly to the sky, buy it now b4 it is too late lol

Posted by shortinvestor77 > 2017-07-17 17:19 | Report Abuse

HEVEA has formed a breakout-pullback-continuation pattern above the EMA9 level accompanied by high volumes. The MACD Histogram has turned green, but the RSI is overbought. Monitor for a breakout above the RM1.53 level, targeting the RM1.66 and RM1.79 levels. Support will be anchored around the RM1.44 level.
http://klse.i3investor.com/blogs/MplusOnline/127874.jsp

Posted by markgor > 2017-07-17 22:35 | Report Abuse

Malaysia' furniture exports are expected to grow by 8% exceeding RM10bn this year, a stronger pace compared with 4.1% to RM9.5bn last year, thanks to the recent ban on rubberwood exports, according to Malaysian Furniture Council president Chua Chun Chai. (Financial Daily)

Posted by specter > 2017-07-18 09:22 | Report Abuse

Hold on to ur horses. Yeeeeha!

Posted by nich0las > 2017-07-18 09:33 | Report Abuse

RM1.5x until QR come out, Ho seh la~!

Posted by specter > 2017-07-18 10:34 | Report Abuse

Still a lot of upside to go

Posted by godhand > 2017-07-18 16:06 | Report Abuse

okay liao la specter. hevea outperform every stock in the similar field lately. consider winner

Posted by Farge168 > 2017-07-19 16:12 | Report Abuse

Lai liao!Tomorrow good show coming!!

Posted by nikicheong > 2017-07-19 17:26 | Report Abuse

It has ding dong around the same narrow range in the past few days. Likely momentum will build in one direction - which way...up or down? Kita nantikan...