Just to update u guys that Liihen has started to resume operation effective today. However, Poh Huat factory remains closed. We should expect a recovery in the coming quarter
A undervalue stock that will certainly recover. The OMAHA Warren Buffet once said " We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful" could be well applied to this situation...
Factory are vaccinating their workers and like the statistics show, the number of hospitalized and infected in Selangor and Klang are decreasing with higher rate of vaccinations..
Although the business will recover as soon as the workers are vaccinated and back to work by mid of September, the price will recover only by end of this year or early next year because the report comes later than the change / progress.
Omg ! Foreigner workers to Malaysia banned , how to ramp up shiftments backlog , all finished goods just keep at port n pay higher container fees , furniture has dark future from now !
SUBUR(6904) is the best earning furniture/timber stock with oil palm estate, it is only 87cent. Big discount!!! Latest financial quarterly result, EPS= 10.29 cent, NAV= RM3.07. Can consider to buy it.
Hi Pasar Pagi, I don't think its plantation is the main source of raw material. Is there anyone able to estimate Liihen's next quarter (Jul to Sep) loss?
hi Sardin, yes,Liihen own plantation not enough to supply her production but at least can hedge against rising price of wood. Liihen mainly export and thus they operate much earlier than local furniture factory. I bet their Jul-Sep result will better than previous.
Hi Pasar_Pagi, I think Liihen will register net loss in Q3. And the amount of loss would be high enough to cause some sell down once the result is published.
The deadly hit to Mslaysia glove n furniture industry will be cancellation of import tax form China health care n furniture products by USA after good virtual meeting between XI n Baiden ! Hope it wont happen !
While US might be reducing the import tax, it is more likely to happen in staggering rather than total cancellation. Furniture industry is still a labor intensive industry and don't forget that wages in China is no longer cheap. Risk of investment should be quite low at RM 3 per share. Even if the business could not recover to the result achieved in 2019, the performance that it requires for the share price to appreciate to RM 3.60 level in early 2022 should be a low hanging fruit to reap. In short, "low risk and moderate / high reward" is what I could think of for Liihen shares at its current price.
Furniture is one of the industries that is expected to turnaround in Q4. Poor result is expected for Q3 due to plant shutdown during MCO. I believe deep pocket investors are aiming for this opportunity as well. What are they waiting for? When inexperienced investors are panic to sell after seeing the Q3 result that is to be released soon because they had not weigh-in the damage of MCO inflicted on the Q3 result, that is the best time for these smart money to take a good position. However, if the fear isn't great enough to motivate a sell down, I believe these smart money will eventually loose patience and starts to flow in by December, otherwise they will miss the chances to buy low.
All the indicators are that worldwide especially USA furniture demand is still strong, the question now is more on the supply side , in view of the logistic - labor - raw material issues.
There are a lot of guru points to raw material price increase as a risk to liihen, but I thought liihen have their own plantation to provide the wood raw material, thus not much impact by the price increase? Anyone can enlighten here? Thanks
@Teosoontong. Main source of raw material is from local suppliers, not its rubber plantation subsidiary. You can check the segmental reporting in quarter or annual report to verify this. The raw material cost can be transferred but may not be at 100% efficiency and it takes time.
@ Sardin, I think in all furniture counters, Lii Hen has the most number of foreign workers. To see it in another angle, she has the most work force compare to peers.
@ sardin, thanks for the info. @ cipta, not surprising since liihen is the biggest rev furniture company, also concentrate in Malaysia only. Let’s see today ‘s QR
what NatsukoMishima concern on force labour is something management must look into it. I just wonder what JKKKP doing whole these years. Most of Liihen raw materials are rubber woods and fiber board, deforestation may not so concern but i have no info whether her wood plantation is on the virgin forest or not.
Davidkkw79, you should have sold it just after MCO 3.0 was announced. But if you have held it until now, it is better to continue to hold it because the business has returned to full swing since Sep 2021.
@Sardin - The drop in revenue and profit is quite drastic. We have to go all the way back to 2011 to see a similar performance from Liihen, when its stock was trading around RM1.00. I have been holding Liihen for a while now; sold a large portion of it when it neared RM4.00. But, it has been an awful year for Liihen, looks like.
@Thirai - Indeed 2021 is an awful year for Liihen because all factories lost production for 3 months (Jun, Jul, Aug) and some factories loss about a month production in Q1. If full vaccination would be able to prevent this in future, I foresee quarterly EPS to normalise to around 15 sen per share due to raising demand for wood furniture in the US. Don't forget that Liihen is still in expansion mode even if under pandemic. For this particular stock at the present, I couldn't figure a better time to buy it, for a handsome capital return when she announces next quarter earning after CNY 2022.
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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....
cherry88
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Posted by cherry88 > 2021-09-01 16:38 | Report Abuse
Just to update u guys that Liihen has started to resume operation effective today. However, Poh Huat factory remains closed. We should expect a recovery in the coming quarter