EVERGRN (5101) : Stocks With Momentum: Evergreen Fibreboard
Evergreen Fibreboard Bhd
Since being picked by our momentum algorithm (refer to “Stocks with Momentum” at www.theedgemarkets.com) on Dec 31, 2014 at 61.5 sen, Evergreen has risen 17.9% to close at 72.5 sen yesterday.
Evergreen Fibreboard is one of the world’s largest producers of wood-based medium density fibreboard (MDF) and particleboard, with annual production of over 1.3 million cubic metres. The company also manufactures downstream products such as paper, veneer, printed, melamine board laminations and knock down furniture.
It operates seven manufacturing plants in Malaysia, three in Thailand and one each in Indonesia and Singapore. The company’s major export markets are the Middle East and Southeast Asia.
Evergreen has a strong management team. However, it operates in a very competitive industry, which has affected its financial performance of late.
Sales have been declining since reaching a peak of RM1.06 billion in 2011, to RM938.7 million in 2013. Pre-tax profit, meanwhile, fell from RM115.4 million in 2010 to a pre-tax loss of RM49.0 million in 2013. The losses in 2013, the first since listing in 2005, was mainly due to weak demand from the Middle East, a supply glut in fibreboard and wood products, as well as rising production and logistic costs.
This trend continued into 2014, with a pre-tax loss of RM12.5 million in the first nine months of 2014. At its peak, the company chalked up pre-tax profit of RM140.4 million in 2007.
Evergreen’s balance sheet has a net gearing ratio of 32.5% with its last dividend paid of 1 sen per share in 2012. No dividends were paid in 2013. Although the stock is trading at just 0.45 times book, Evergreen’s fundamentals appear unexciting given the uncertain earnings outlook.
The Edge Research rates Evergreen with Fundamental and Valuation scores of 0.75 and 1.20, respectively, both out of a maximum of 3.0.
http://www.theedgemarkets.com
Evergreen Fibreboard Bhd
Since being picked by our momentum algorithm (refer to “Stocks with Momentum” at www.theedgemarkets.com) on Dec 31, 2014 at 61.5 sen, Evergreen has risen 17.9% to close at 72.5 sen yesterday.
Evergreen Fibreboard is one of the world’s largest producers of wood-based medium density fibreboard (MDF) and particleboard, with annual production of over 1.3 million cubic metres. The company also manufactures downstream products such as paper, veneer, printed, melamine board laminations and knock down furniture.
It operates seven manufacturing plants in Malaysia, three in Thailand and one each in Indonesia and Singapore. The company’s major export markets are the Middle East and Southeast Asia.
Evergreen has a strong management team. However, it operates in a very competitive industry, which has affected its financial performance of late.
Sales have been declining since reaching a peak of RM1.06 billion in 2011, to RM938.7 million in 2013. Pre-tax profit, meanwhile, fell from RM115.4 million in 2010 to a pre-tax loss of RM49.0 million in 2013. The losses in 2013, the first since listing in 2005, was mainly due to weak demand from the Middle East, a supply glut in fibreboard and wood products, as well as rising production and logistic costs.
This trend continued into 2014, with a pre-tax loss of RM12.5 million in the first nine months of 2014. At its peak, the company chalked up pre-tax profit of RM140.4 million in 2007.
Evergreen’s balance sheet has a net gearing ratio of 32.5% with its last dividend paid of 1 sen per share in 2012. No dividends were paid in 2013. Although the stock is trading at just 0.45 times book, Evergreen’s fundamentals appear unexciting given the uncertain earnings outlook.
The Edge Research rates Evergreen with Fundamental and Valuation scores of 0.75 and 1.20, respectively, both out of a maximum of 3.0.
http://www.theedgemarkets.com
