Comments from Poh Huat: "US furniture importers, which have already responded by diverting part of their orders to other furniture exporters in Southeast Asia prior to the imposition of the duties, will likely place more orders with producers in Vietnam and Malaysia
50 years of umno has propelled malaysia to the cheapest labor country, even lower than thailand and china, now we are on par with indonesia. Very well done Malaysia!
20 mil capex is for the whole year, not during this quarter.
martinchua88332 liihen spent 20 mil to upgrade ppe ( property ,plant and equipment) during the quarter. they will distribute good dividend for the next quarter. 21/02/2019 22:19
It is trade-off between "growth" and "income". Without increase or modernize the machineries, the capacity and sales may not go further, and will sooner be lack behind the competitor. The Board is testing us whether we are long term or short term investors. ha ha
i read liihen is using this 20 million capex to upgrade machine to automation. So they can less dependent on foreign workers which has been the reason for past 2 quarters drop in profit. Next time with automation in, they can improve their profit margin and also grow their profits.
i think any manufacturing line need to go automation at least partially on those work can be done by automation system. Malaysia is going to do keep increase minimum wages for workers to RM 1500.
Moving forward, we opine that Lii Hen will benefit from (1) lower engineered wood selling prices (lower cost of production), and (2) stronger demand from US (result of US-China trade war).
There's infact no amount of accuracy to suggest TP of any stock prices . Different research investment houses set different TP prices and some with vested interests set higher TP to dupe and offload their shares to the ignorance and dumbed while this conman are laughing to the bank . Do your own research and set your own TP stock price . I treat this investment houses is a bullshits house just bcos many investors still applying their formula got short-changed and stuck up with their stocks . A buy called must be treated as a sell called instead .
Fuck HL con house. Set TP RM5.04 so high and thought that the market will fulfilled this white collar dream ah ? Now investors are smarter and every 2 cents upwards quote you can see plenty of sellers to secure profits . Maybe 5.04 got to wait until the beard touch the floor.
Lii Hen’s FY18 core earnings of RM58.4m (-24.7%YoY) came in within our expectation, accounting for 101.1% of our full-year forecast. The group posted higher sales volume in 4Q18 (+6.4%QoQ; +19%YoY) but was weighed down by stronger ringgit. Moving forward, under the lower cost environment, we opine that margins will improve. A DPS of 2sen was declared. We maintain our earnings forecasts and a BUY rating with an unchanged TP of RM3.66 as we pegged to an unchanged PE multiple to 11x of FY19 EPS.
In line. Lii Hen’s FY18 core earnings of RM58.4m (-24.7%YoY) came in within our expectation, accounting for 101.1% of our full-year forecast.
Dividend. Declared 4th interim DPS of 2.0 sen (ex-date: 11 Mac 2019) bringing YTD dividend to 11.5sen, translating to a dividend yield of 4.1%.
QoQ. Revenue increased 6.4% from USD47m to USD50m, however thanks to the stronger USD against MYR (4Q18: RM4.17/USD vs 3Q18: RM4.08/USD), sales in terms of ringgit improved by 8% to RM216.8m. Core earnings ballooned by 39.7% to RM22.1m on higher sales volume and lower effective tax rate.
YoY. Revenue grew strongly by 19% to USD50m in 4Q18 (from USD42m in 4Q17), however this only translated to a 17.3% in terms of ringgit revenue, as there was a slight decrease in local sales by 2.3%. Core earnings increased by 43.3% due to higher sales volume and lower operating cost.
YTD: In FY18 the group achieved a 21% sales growth in to USD192m, however sales in ringgit terms was only at 11.7% due to the stronger RM against USD (FY18: RM4.03/USD vs FY17: RM4.29/USD). However, core net profit declined by 24.7% to RM58.4m, mainly attributed to higher operating cost, chiefly from the implemented foreign labour levy (effective Jan-18).
Outlook. Moving forward, we opine that Lii Hen will benefit from (1) lower engineered wood selling prices (lower cost of production), and (2) stronger demand from US (result of US-China trade war). We also think that the group will be less affected by the labour levy in FY19 as they had the year to adapt to and adjust their ASP.
Forecast. Unchanged. We maintain BUY, with unchanged TP of RM3.66 pegged to PE multiple of 11x of FY19 EPS. We continue to like Lii Hen for its strong balance sheet (net cash per share 35.8 sen as at 4Q18), generous dividend payout (yield of 6.4%) and ongoing efforts to adopt effective cost management.
Source: Hong Leong Investment Bank Research - 22 Feb 2019
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Posted by ahbah > 2018-11-30 12:27 | Report Abuse
Buy some export counters like Lii Hen to hedge against our weakening Ringgit kept in FD.