overvalued at 44x PE now. PE 16x only for MDB stocks... Sold all mine the last time at Rm 2.01. The surge in price beyond RM 2.00 could be more to do with a higher then expected USD/MYR, positively affecting the next quarters earnings, and earnings for quarters to come for 2015 or pure front loading. CAUTIOUS!!
MDF industry outlook and customer profile Investors were interested in the MDF pricing cycle over the last 10 years and how that correlated to EVF’s financial performance. Management explained that its record net profit of RM131m achieved in FY07 was mainly on the back of its acquisitions of the Hat Yai and Nilai capacity plus record-high MDF pricing in US$ terms. The next downturn came in 2011-2014 when a combination of high raw material prices, and major global capacity addition (50% increase in 2010-13) resulted in price dumping by new players in Thailand and Indonesia. The current pricing environment is favourable in RM terms given the weak RM. US$ pricing has yet to achieve its previous peak in 2007 (still ~15-20% below). Going forward, EVF will be less topline focused; rather, it will be selling higher-margin products such as thinner MDF, which are priced at 10-15% higher than conventional boards.
Dividend policy On dividend policy, EVF reiterated its 20-50% dividend payout (although that was suspended in FY13-14 when it made losses). Investors could even be surprised by a special dividend should the sale of its rubber plantation materialise. Management guided for an effective tax rate of 10-15% given the various capex allowances and previous unutilised tax losses, which suggests scope for earnings upside potential as our estimated tax rate is 17%. Blue-sky target price Our sensitivity analysis suggests that every 1% appreciation of the US$ vs. RM will increase earnings by 10%. Assuming an average US$/RM of 3.70 (vs. 3.60 currently), FY16 EPS could rise to 30sen. At 12.5x FY16 P/E, this suggests a target price of RM3.75 (80% upside). At an average US$/RM of 3.80, FY16 EPS could increase to 36 sen, and translates to a target price of RM4.50 (130% upside).
every 1% of RM drop, Sign will increase profit by 10%. So new TP is RM4.5 if USD is in the range of 3.7-3.8.....but today it is 3.9....can it be 4.2 by Sept?
Continue to accumulate tomorrow. There is still at least one more round of big rises before the U.S. interest rate hike on September 16th. At this price there is still good money to be made.
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....
Anonymous99
65 posts
Posted by Anonymous99 > 2015-07-31 14:37 | Report Abuse
When is the quarter result?