Hi FreeAsABird, i agree with your statement. For different size of business and different type of business, we can't compare the debt directly as it is apple to orange comparison... Evergreen business scale is much larger and their MDF business is more capital intensive compared to Hevea's. It is just like you can't compare with Homeritz as well as Homeritz's furniture business does not require a lot of advanced & expensive machineries (Homeritz requires mainly skilled workers to assemble the sofa, dining chairs, bed frames etc)... so it is not fair to compare just like that... Evergreen has a lot of imported machines that are efficient (very much automated and require less direct labors), that are able to churn out high quality MDF/particleboards... furthermore, I feel that Evergreen's debt level is acceptable after considering all these factors...
the way this wahahaha wrote reminds me of abcb, who had been banned by i3. I think this is his second identity (as abcb also thought that Hevea is the leading MDF player.. that is very funny)... come on, wahahaha (abcb multiple), pls dun create more joke with your ignorance... thanks.
wahahaha.. thanks for posting the above analysis.. in fact, it says that 2017 will be a better year for evergreen and that is why we are investing in it... it seems like you were trying to sabotage evergreen but actually help to promote it.. haha...
btw, i dunno from where you got that analysis... i showed u one from RHB:
29 November 2016 Looking Forward To 2017
We expect Evergreen to fare better in 2017 as its new capacity expansion, coupled with our revised USD/MYR assumption of 4.15 (from 3.80), would help to boost earnings visibility over the medium term. Maintain BUY with our TP tweaked to MYR1.24 (from MYR1.30, 23% upside, 10x 2017F P/E) following our earnings revision. This is as we factor in lower ASPs going forward to take into account the current stiffening pricing competition.
Victimised by low oil prices. In our view, the current low oil price environment has caused some of Evergreen Fibreboard’s (Evergreen) Middle East clients (which makes up close to 50% of total group sales) to defer/cancel their orders for its medium-density fibreboard (MDF) products in 2016. To mitigate this, we gathered that management has been channelling its products to other markets, such as the developing South-East Asia region. We see this as an interim measure to help offset the negative impact to its bottomline. As we anticipate crude oil to trade at a higher average of USD60/bbl in 2017, we believe demand for MDFs would pick up accordingly.
2017 to benefit from capacity expansion. Housed under its Batu Pahat plant, the group’s maiden ready-to-assemble (RTA) furniture line is currently in rampup mode after being commissioned in June. We expect delivery and installation of the proposed second RTA line in due course, with official commissioning by mid-2017. On top of that, we gather that the installation of its new integrated particleboard/MDF production line is currently ongoing at its Segamat plant. We expect commercial production to kick-start come 2Q17. Upon commissioning, Evergreen would be able to produce premium particleboards at quality grades of E1, E0 and Super E0.
Forecast revisions. We cut our FY16F-18F EPS by 3-15% as we revamp our model to take into account several key assumptions, including: i. Revised USD/MYR of 4.15 going forward (from 3.80); ii. Lower ASPs of USD170-180/cu m (from USD180-190); iii. Higher effective tax rate of 24% for 2016 (from 20%).
Maintain BUY. Our TP dips slightly to MYR1.24 (from MYR1.30, 23% upside) following our earnings revisions, which are based on an unchanged 10x 2017F target P/E. We expect earnings to rebound in 2017, as its ongoing capacity expansion would likely propel earnings to break the MYR100m threshold. Valuations are undemanding. Maintain BUY.
2017 net profit is expected to break RM100m (more than its peak in 2015 of RM93m)...
is this possible? let's review:
in 2015, USD/MYR is around 4.2-4.4 in 1st half of 2016, USD/MYR dropped significantly to around 3.8-3.9. in 2017, USD/MYR is expected to return to 4.4-4.5 or even higher... with this, plus the new expansion of RTA, MDF & particleboard (premium grade)... i think net profit of RM100m is achievable... this 100m has taken into account of lower average selling price (ASP).. else it will be more... and in 2015, the adjusted share price hit as high as RM1.70 (after adjustment from bonus issue of 2:1)... so by end of 2017, it is not hard to see the price to go back to this value or higher if the performance catches up... can you hold for one year? no, then pls skip this share...
Right - but exporters are currently appealing to BNM that 75% of all new export proceeds to be in the form of MYR is too much. Export players are currently negotiating @ 50% - stay tune for news
haha... confirmed this wahahaha is the abcb who had been banned, based on what he wrote... simply stupid...
harloooooo wahahaha a.k.a abcb a.k.a. clown:
Evergreen is NOT a furniture maker... if u dunno anything, pls just shut up... it is very stupid of you to compare Evergreen with furniture makers like Liihen, Pohuat, Latitud or Homeritz...
You know nothing about Evergreen but act like an expert.. that makes us here really sick of you...
Admin of i3, can you please ban this clown again... we strongly demand for banning this joker who posted wrong and misleading info...
as furniture makers are not as capital-intensive as MDF maker, so you are comparing an apple to an orange... It is not fair to say that Evergreen is bad as it requires more capital, it is just because of the nature of their business... so Mr Clown wahahaha, can you grow up and widen your knowledge before you comment? please....
i sold evergreen at 0.99. What i think is even the production capacity is expanded, there could be the risk that the market would not absorb all its products. Anyway, the price now is quite attractive for me.
Evergreen badly run meh ? Ok mah....the business are making monies, despite board price came down mah......!! also most of the corp plans, had been on course mah.....!! where got badly run leh ?
I was frighten by the big shark manipulating the price from RM1.x to RM0.7x, then suddenly went up to RM1.x again, and now goes back to RM0.90. unless it reach my best entry price otherwise i would rather give up to step in again.
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Posted by Dolly_Chai > 2016-12-05 10:39 | Report Abuse
Hi FreeAsABird, i agree with your statement. For different size of business and different type of business, we can't compare the debt directly as it is apple to orange comparison... Evergreen business scale is much larger and their MDF business is more capital intensive compared to Hevea's. It is just like you can't compare with Homeritz as well as Homeritz's furniture business does not require a lot of advanced & expensive machineries (Homeritz requires mainly skilled workers to assemble the sofa, dining chairs, bed frames etc)... so it is not fair to compare just like that... Evergreen has a lot of imported machines that are efficient (very much automated and require less direct labors), that are able to churn out high quality MDF/particleboards... furthermore, I feel that Evergreen's debt level is acceptable after considering all these factors...