InvestIdeas

not vested

Climb aboard now!

We deem 9M16 core net profit in line as we expect a strong 4Q.

2nd interim DPS of 1.3 sen slightly ahead of expectations.

Strong dollar and and rising PB prices a perfect scenario for Hevea.

We raise our FY17-18F EPS by 5-15%.

As we roll over our valuation to end-17, our SOP-based target price rises by 17% to RM2.37.

Source: CIMB

https://brokingrfs.cimb.com/f9Bzg9C3k0v ... -UDLg2.pdf

not vested

Technical Tracker - HLIB Retail Research
Trading Buy: HEVEA - 5095
(Last price: RM0.885, Potential upside +18.6%)

Company Profile
• HEVEA produces particleboard and ready-to-assemble (RTA) furniture. The company exports its products throughout the Asia Pacific region.

Trading Catalyst

• HEVEA’s bottomline may gain traction with the stronger USD outlook in 2H18 as more than 90% of the revenue is USD denominated.

• Furniture demand is likely to surge in Japan ahead of the Japan Olympics 2020, where HEVEA having the Japanese Industrial Standard (JIS) certification could be one of the beneficiaries within the region.

• Besides, the escalation in trade tension between the US and China could benefit Malaysia’s products (seen as more competitive compared to products in China).


Technical View
• Resistance: RM0.935 / RM0.985 / RM1.05
• Support: RM0.855 / RM0.840
• Cut loss: RM0.830

Key Financial Stats
• Net cash: RM23.2m (4.1 sen)

Source: Bloomberg, HLIB

not vested

HEVEA (RM0.65 – BUY- HLIB RESEARCH TP RM0.83) – Potential downtrend line breakout

Continue to shine. Hevea risk-reward profile is more attractive now after tumbling 22% from its 52-week high of RM0.835 to RM0.65 last Friday, supported by undemanding valuations of 12.3x (ex NCPS of 18.5sen or ~28% to share prices) FY21E P/E (vs 5Y mean of 15.1x) and 0.88x P/B (20% below 5Y mean of 1.1x), coupled with a strong 19% EPS CAGR from FY19-22

We expect Hevea to post a seasonally better 4Q20 results particularly in the RTA division, benefitting from pent-up demand, stocking up activities and work-from-home arrangements as a result of disruption of supply chain and trade diversions

However, growing pressures from stronger RM, higher freight costs and raw material prices remain a challenge to the group

R1-R2: 0.69-0.72
LT objective: 0.80
S1-S2: 0.61-0.60
Cut: 0.58

Source: HLIB