Lii Hen Industries Bhd

Lii Hen Industries Bhd

Postby winston » Sun Sep 24, 2017 5:11 am

not vested

“The disasters in the United States can have a positive impact to companies here although it is hard to say when the impact will kick in as there is a lag. But I think the impact will come in early next year,” Hong Leong Investment Bank Research’s (HLIB Research) analyst Rachael Hong Hui Chee tells StarBizWeek.

She recently initiated coverage on one such potential beneficiary of the reconstruction activities in the United States: Lii Hen Industries Bhd with a “buy” rating and a target price of RM5.04.

Hong says that the recent events there may help boost Lii Hen’s furniture exports as the company ships 77% of its exports to the United States. Malaysia’s wooden furniture exports surged by 25% a few months after Hurricane Katrina in 2005.

“At that time Lii Hen was a small company and while the recent hurricanes did not damage as many homes as Katrina, we still a see a positive impact.

“This company exports are mainly to the west coast of the United States and they (vendors) have many branches across the country. According to its management there will definitely be a positive impact on sales,” Hong says.

She says that the company has seen an increase in orders since the middle of the year.

Other than the hurricanes that could help boost its sales, her report notes that export sales, mostly bedroom sets and panel products, have grown by 59% from RM373mil in 2014 to RM592mil last year.

In US dollar terms, exports sales grew by 49% from US$32.2mil in 2014 to US$47.9mil in 2016.

“Moving forward, we are positive that Lii Hen will continue to demonstrate decent earnings growth that’s underpinned by improving utilisation rate, increasing product range and a bulletproof balance sheet,” she says.

Hong notes that another catalyst to growth could be the company’s decision to expand its product range by diversifying into the manufacture and design of upholstery sofa sets.

“The strengthening of the ringgit notwithstanding, the increase in demand will offset the impact of the foreign exchange,” she says.

Source: The Star
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 108866
Joined: Wed May 07, 2008 9:28 am

Re: Lii Hen Industries Bhd

Postby winston » Tue Aug 27, 2019 9:58 am

not vested

Trading Buy: LIIHEN-7089
Solid fundamentals and balance sheet to steer further growth
(Last price: RM2.94, Potential upside +12.6%)

Company Profile
LIIHEN manufactures and markets bedroom, dining and other household furniture. It had further expanded its product range by diversifying into the manufacture and design of upholstery sofa sets.

Trading Catalyst

Apart from the weak ringgit climate, we like LIIHEN for its healthy dividend yield (5.6% for FY19-21) and current net cash/share of 54.8 sen or 18.6% to share price, with cheap valuation of 6.9x FY20 P/E (Ex-cash PE of 5.6x).

Moreover, bright outlook in the global furniture market (Global Furniture industry expects a 5.2% CAGR for 2019-2023) and its fruitful diversification to upholstery products as well as growing trade diversion from unresolved US-China trade war should enhance stable earnings growth.

Technically, the stock is ripe for a triangle breakout soon to lift prices higher towards RM3.13-3.31 levels.

Technical View
Resistance: RM3.04 / RM3.13 / RM3.31
Support: RM2.85 / RM2.80
Cut loss: RM2.78

Key Financial Stats
Trading at 6.9x FY20E (ex-cash P/E is 5.6x), supported by attractive 5.6% DY

Source: Bloomberg, HLIB
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 108866
Joined: Wed May 07, 2008 9:28 am


Return to L to R

Who is online

Users browsing this forum: No registered users and 1 guest