What's the expected impact of the new minimum wage at RM1,200 per month starting 1 Jan 2020?
The minimum wage is set to increase year after year given the pledge of RM1,500 target set by the current government. Any idea how much automation is possible for furniture makers?
Upgrade to buy with a higher target price (TP) of 76 sen: Homeritz Corp Bhd’s first quarter of financial year 2020 (1QFY20) core profit after tax and minority interests (Patami) of RM7.8 million (quarter-on-quarter: +54.2%); year-on-year: +82.3%) was above our expectations, accounting for 35.9% of our full-year earnings.
The better-than-expected earnings were due to higher-than-expected sales volumes. We raise our FY20/21 forecasts by 5.5%/2.5% respectively to account for better sales volumes. After our earnings adjustment, we upgrade our rating to “buy” (from “hold”), with a higher TP of 76 sen (from 74 sen previously), based on 10 times revised current year 2020 earnings per share of 7.6 sen. We continue to like Homeritz due to its healthy net cash per share of 28.9 sen and increased automation efforts.
Its core Patami grew 54.2% in tandem with a revenue growth of 23.2%, and better profitability was driven by better sales volumes, lower production costs and a weaker ringgit.
Think of it: This is small counter, why operator or investment bank want to push the price higher to let us earn their money? It won't up above 0.8 within 2 years base on my exp
Upgrade to BUY, TP: RM0.76. After our earnings adjustment, our TP rises to RM0.76 from RM0.74 previously, based on 10x revised CY20 EPS of 7.6 sen. We continue to like Homeritz due to healthy net cash per share per share of 28.9 sen and increased automation efforts. We upgrade our call to BUY (from Hold previously) following recent share price retracement and our earnings upgrade.
Good that it's still maintain low profile.. the big institutional players are yet to invest this counter. Give more time for small fish like us to accumulate first. If you are an investor you would want your best ideas to remain undervalued long enough for you to accumulate!
It will be fairly probable for it's EPS to hit 9 or even 10 sen for the current financial year. So it's pretty possible for its share price to hit 76 sen or higher.
USDMYR touch 1.5 year low thats why price been hard to move up, hopefully its just a matter of time before ppl see the value of the company is more than any FX rate.
IB upgrade tp but price drop some more..better CABUT first,
global uncertainty in growth this yr does not augur well for furniture export stks, just for short-term play only, seems over already..
perangbrown Upgrade to BUY, TP: RM0.76. After our earnings adjustment, our TP rises to RM0.76 from RM0.74 previously, based on 10x revised CY20 EPS of 7.6 sen. We continue to like Homeritz due to healthy net cash per share per share of 28.9 sen and increased automation efforts. We upgrade our call to BUY (from Hold previously) following recent share price retracement and our earnings upgrade. 15/01/2020 2:46 PM
China exports & imports on hold because of CoV and slowdown in port movement. Palm oil exports to China can be affected. China will export less furniture and Malaysia stand to gain from exports to US-EU-Japan. Furniture exports to Australia to accelerate as new homes are built to replace those destroyed by bush fires. These are positive signs for the furniture export bizness
If I were at AGM, I would ask these these questions:
1. In view of management, is there any growth catalyst in plans aside from ramping up marketing efforts and joining more furniture fares?
2. If so, how much % increase from marketing cost is expected this year? How much marketing was spent last year?
3. Mandate to buy up to 10% of outstanding shares were acquired for 2 years in a row, but no actual shares buyback also. Does management have better ideas to utilize the cash hoard of RM86 mil?
4. How much % are the expecting cost labour from implementation of minimum salary cap?
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....
observatory
1,066 posts
Posted by observatory > 2020-01-06 12:45 | Report Abuse
What's the expected impact of the new minimum wage at RM1,200 per month starting 1 Jan 2020?
The minimum wage is set to increase year after year given the pledge of RM1,500 target set by the current government. Any idea how much automation is possible for furniture makers?