Heveaboard Bhd. : Neutral price, but decent fundamentals

Heveaboard Bhd. relative valuation is now NEUTRAL. It was previously rated UNDERVALUED, and has a fundamental analysis score of 61.

Our analysis is based on comparing Heveaboard Bhd. with the following peers – Focus Lumber Bhd., Evergreen Fibreboard Bhd., Astino Bhd., Seacera Group Bhd., Woodlandor Holdings Bhd., Dongwha Enterprise Co., Ltd, ML Global Bhd., Dehua TB New Decoration Material Co., Ltd. Class A, Century Plyboards (India) Ltd. and Archidply Industries Limited (5197-MY, 5101-MY, 7162-MY, 7073-MY, 7025-MY, 025900-KR, 7595-MY, 002043-CN, 532548-IN and 532994-IN).

Relative Valuation

Heveaboard Bhd. is currently neutrally valued, as its previous close of MYR 3 lies within the CapitalCube estimate range of MYR 2.97 to MYR 3.83. Over the last 52 week period, Heveaboard Bhd. has fluctuated between MYR 1.31 and MYR 3.04.

Relative Valuation

Company Overview

  • Relative performance over the last month and last year is around the peer median.
  • Heveaboard Bhd.’s current Price/Book of 1.10 is about median in its peer group.
  • 5095-MY‘s operating performance is relatively good compared to its peers. The market currently does not expect high earnings growth relative to its peers but seems to expect the company to maintain its relatively high rates of return.
  • 5095-MY has relatively high profit margins while operating with median asset turns.
  • Changes in annual revenues are in line with its chosen peers but lags in terms of earnings suggesting that the company is less cost conscious and may be spending for growth.
  • 5095-MY‘s return on assets currently and over the past five years suggest that its relatively high operating returns are sustainable.
  • The company’s margins are around the peer medians and do not suggest any benefit from a pricing or an operating cost advantage versus peers.
  • 5095-MY‘s revenue growth in recent years and current PE ratio are both around their respective peer medians suggesting that historical performance and long-term growth expectations for the company are largely in sync.
  • The company’s level of capital investment is relatively low and suggests it is milking the business.

Investment Outlook

Heveaboard Bhd. has a fundamental score of 61 and has a relative valuation of NEUTRAL.

Heveaboard Bhd. is on the top left quadrant of the CapitalCube Value – Price Matrix. We classify this space a ‘Value Play’. Here, Heveaboard Bhd. is potentially undervalued, since it trades below its CapitalCube Implied Price of 3.40. At the same time, Heveaboard Bhd. is also fundamentally strong with a score of 61. This is a classic value stock definition.

Fundamentals Vs Relative Valuation

Drivers of Valuation

The market seems to expect 5095-MY to maintain its relatively high returns.

5095-MY‘s operating performance is higher than the median of its chosen peers (ROE of 12.15% compared to the peer median ROE of 4.75%) but the market does not seem to expect higher growth relative to peers (PE of 9.79 compared to peer median of 10.30) but simply to maintain its relatively high rates of return.

The company’s current Price/Book of 1.10 is about median in its peer group.

Valuation Drivers

5095-MY has moved to a relatively high ROE from an Harvesting profile at the prior year-end.

ROE % (On Common Equity)
 

Peer Analysis

A complete list of valuation metrics is available on the company page.

Company Profile

Heveaboard Bhd. operates as an investment holding company, through its subsidiaries which engages in manufactures, trades and distributes particleboard and particleboard-based products. The company operates through the following business segments: Manufacturing, Trading and Others. The Manufacturing segment is involved in the business of manufacturing particleboards and manufacturing of ready-to-assemble furniture. The Trading segment is engaged in the trading of particleboards, other panel boards and trading of ready-to-assemble furniture. The Others segment activities include investment holding. The company was founded on September 3, 1993 and is headquartered in Gemas, Malaysia.

Disclaimer

The information presented in this report has been obtained from sources deemed to be reliable, but AnalytixInsight does not make any representation about the accuracy, completeness, or timeliness of this information. This report was produced by AnalytixInsight for informational purposes only and nothing contained herein should be construed as an offer to buy or sell or as a solicitation of an offer to buy or sell any security or derivative instrument. This report is current only as of the date that it was published and the opinions, estimates, ratings and other information may change without notice or publication. Past performance is no guarantee of future results. Prior to making an investment or other financial decision, please consult with your financial, legal and tax advisors. AnalytixInsight shall not be liable for any party’s use of this report. AnalytixInsight is not a broker-dealer and does not buy, sell, maintain a position, or make a market in any security referred to herein. One of the principal tenets for us at AnalytixInsight is that the best person to handle your finances is you. By your use of our services or by reading any our reports, you’re agreeing that you bear responsibility for your own investment research and investment decisions. You also agree that AnalytixInsight, its directors, its employees, and its agents will not be liable for any investment decision made or action taken by you and others based on news, information, opinion, or any other material generated by us and/or published through our services. For a complete copy of our disclaimer, please visit our website www.analytixinsight.com.

Leave a Comment