Today, we feature a note on Focus Lumber Berhad in our FundTech Radar – 4th Sept 2018. FLBHD is primarily engaged in manufacturing and sale of plywood, veneer, and Laminated Veneer Lumber (LVL). Part of *Recreational Vehicle (RV)* is made out of plywood. RV market is the main growth driver. About 67% of its total revenue in FY17 was derived from US, most of which is to the RV industry in Elkhart, Indiana.
· A healthy 3-year (FYE15-17) revenue CAGR of 5.4% but core PATAMI has been on a decreasing trend since FY16.
· Its FY17 core PATAMI margin fell to 6.7% from 9.5% in FY16.
· Net cash position of RM29.4m (28.5 sen per share) as at 31 Jun 2018
· Consistent dividend payment since FY05. Div. yield of 5.4% with div. payout of 70.4%.
· The largest shareholder of FLBHD is a Taiwanese Lin family.
· RV wholesale shipments are expected to reach 539k units by the end of 2018, a 7% increase from the 504k units shipped in 2017.
· Strengthening USD against MYR as well as the increasing selling price of plywood could potentially have a positive impact on its business going forward.
· Currently trading at 11.6x 12-month trailing P/E (9.6x if excludes 28.5 sen net cash per share), a 2.2% discount to its peers.
Bullish Wedge formation breakout.
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This FundTech Radar report is intended for educational purposes only. It represents a preliminary assessment of the subject company, and does not represent initiation into CIMB's coverage universe. It does not carry investment ratings and CIMB does not commit to regular updates on an ongoing basis.
4th Sep 2018
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