Furniture Business: Liihen (7089), Hevea (5095), Latitube (7006) mini review

LII HEN INDUSTRIES BHD, Liihen (7089), is a malaysian furniture manufacturer, 100% operates wholly in Malaysia, but 82% market is from America, followed by Asia (9%) and Malaysia (7.5%), in 2011. In other words, the main income of Liihen is from exporting furniture to America in 2011.

In terms of PE and dividend valuation, Liihen is not bad investment even with its market price > RM1.50. HOWEVER, latest annual report reveals one biggest challenging for furniture business in Malaysia, that is, minimum wage.

HeveaBoard Berhad (Hevea, 5095) : Buy, Hold or Sell?

After holding Hevea more than one year and sharing three parts my homework with my visitors last year (that entitled Introduction and Background Study, The Potential of China Market and its Operation Segments, and 2011 Performance Review) in my humble personal blog, my patience gets paid, finally. Maybe it is due to the so-called Cold Eyes' effect since Cold Eyes senior mentioned Hevea on last Friday. No matter what the reason is, the most important question I need to answer now is what is the target price that should I sell my Hevea shares in open market.

 

 

It is really a crucial question that bother me, especially, when my invested company is appreciated. So far, I am still cannot figure out the best way to optimise all the profit. Nonetheless, after I figure the difference between Positive and Negative Value Investing Strategy and the Seven Habits of Highly Unsuccessful Investors in Stock Market, I have a very simple idea, that are, (1) bear in mind which value investing strategy that I applied now, and (2) if I can avoid those 7 bad habits, then I should achieve the so-called optimal profit.
 

HeveaBoard Berhad (Hevea, 5095) : 2011 Performance Review

Since the annual report haven't come out, this review only based on the last four quarter reports of HeveaBoard (Hevea, 5095).
Firstly, let's have a look at the activities from the four quarters as follows:

Quarter 1, 2011
"The lower PBT was due mainly to the lower USD exchange to Ringgit as more than 80% of the Group’s revenues were derived from the export market and transacted in US Dollars that had resulted in lower revenues and profit margins.
The production volume for particleboard was lowered due to short supply of wood material caused by the severe flood encountered in the early part of the year and prolong rainy season.
Prospect for the current financial yearThe Group expects the particleboard prices to improve further and RTA furniture to be stable with
increasing demand."

HeveaBoard Berhad (Hevea, 5095) : The Potential of China Market and its Operation Segments

In the previous post, we have study some background information of HeveaBoard Berhad (Hevea, 5095). But two questions haven't been discussed, that are:
1. How are the profits of Particleboard manufacturing sector and Ready to Assemble (“RTA”) furniture sector, and which one has better profitability?
2. Is it significant for HeveaBoard to export 50% of its particle board to China market? These two questions will be discussed further in the coming post.

Therefore, in this post, we will step-by-step discuss two of these questions?

1. From the fourth quarter quarter report of Hevea, Segmental Reporting, as stated below:

HeveaBoard Berhad (Hevea, 5095) : Introduction and Background Study

In this post, I am going to share my homework about HeveaBoard (Hevea, 5095). Still different strategy I use to evaluate Hevea Board since Hevea made a Restructuring Schemeunder Section 176 of the Companies Act 1965 pursuant to the Court Order dated 14 December 2009 to overcome the unprecedented drastic fluctuation in currency exchange rates against the USDollars at the end of 2008/early 2009. Therefore, as you can see from the table below, Hevea only managed to earn 1sen in the financial year 2008 and its market price reached less than 20sen only.