Poh Huat

Poh Huat

Postby winston » Sun Sep 24, 2017 5:17 am

not vested

TA Research’s analyst Ooi Beng Hooi, who covers Poh Huat, expects a rise in sales for the company although it would be difficult to quantify at this juncture.

“The people in the United States will definitely need to replace their damaged or lost furniture. However, the extent of the damage remains to be seen,” Ooi says.

Ooi tagged a “buy” call on Poh Huat with a target price of RM2.51. “Poh Huat is a listed furniture manufacturer with one of the highest export sales to the United States. More than 90% of its sales are to the United States.

“Some 25% of office furniture are sold to Canada but the Canadian company will usually redirect them to the United States,” Ooi says.

Ooi notes that Poh Huat had recently introduced a new product: panel based bedroom set that’s being manufactured by its Muar plant that will help drive growth in the immediate term.

“Also one of its plants in Vietnam has seen capacity expand by 20% following a renovation after the fire incident there. This is another growth driver for the company,” he says.

On the possible earnings risks from the strengthening ringgit, Ooi reiterates that he still expects for Poh Huat to achieve a record year in 2017 (FY17 ending Oct 31, 2017).

“Without the impact of the foreign exchange, they will still grow unless the ringgit strengthens very significantly,” he says.

In his June report, he says that he has pencilled in a ringgit to US dollar exchange rate assumption of RM4.25 to the dollar in its FY17 earnings forecasts.

While the furniture industry is mostly fragmented in Malaysia, the positive impact will be seen by furniture manufacturers that have most of their sales derived from the United States.

Investors will also have to bear in mind that the impact of natural disasters will mostly be a one-off event that will add to their earnings.

Source: The Star

http://www.thestar.com.my/business/busi ... YITbEkH.99
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Re: Poh Huat

Postby winston » Sun Sep 22, 2019 8:08 am

not vested

Furniture maker Poh Huat is a winner in US-China trade war

Friday, 20 Sep 2019

KUALA LUMPUR: Furniture maker Poh Huat Resources Holdings Bhd posted a higher net profit in the third quarter ended July 31, as revenue jumped on rising demand from buyers in the US.

Earnings rose 22% to RM11.27mil, or five sen a share on the back of a 14% jump in turnover to RM164.8mil.

The company, which produces office furniture and bedroom sets at factories in Malaysia and Vietnam, has declared a second interim dividend payout of two sen share.

"As in previous quarters, our Malaysia operations continued to receive sustained orders for our panel-based bedroom sets from our customers in the US," the company said in a statement today.

"During the quarter, we also received substantial increase in orders from one of our major office furniture customers." Meanwhile, Poh Huat's operations in Vietnam posted an 11.5% sales growth, also driven by orders from the US.

"For the global furniture trade, Vietnam is expected to benefit the most, with furniture exports increasing by 30% this year, followed by Malaysia as orders shift to these South East Asia exporters," Poh Huat said.

The company sees "permanent structural changes in the supply chain" growing from the trade tension between the US and China that are forcing manufacturers to relocate out of China.

"We have adapted our production activities to accommodate a wider range of products for our US customers," it said.

"We are beginning to see improved operational results, particularly from Vietnam where we have enjoyed smoother production runs," it added.

The US first slapped a 10% tariff on furniture imports from China in September last year.

The tariff has been raised to 25% since June 2019 and will be further increased to 30% from December.

"As furniture exports from Malaysia are spared the tariff, this translates to a tremendous price advantage for Malaysian furniture exporters over their Chinese peers in the US market," AmInvestment Bank said in a report earlier this week.

Source: The Star

https://www.thestar.com.my/business/bus ... fZOhIpW.99
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