SHH (7412) - SHH - A Leap Above
SHH 新兴发资源 7412 SHH RESOURCES HOLDINGS BHD
22 August 2014
With the robust economy data from the West, the local furniture business had been recovering and seeing a growth as well with the rising demand from the West. While most had risen above their net tangible asset, SHH is definitely something that is worth a look at.
Let's have a quick look at the current price movement of SHH.
SHH - A Booming Front
SHH
Resources Holdings Berhad is engaged in the manufacturing of wooden
furniture, including the kiln drying and treatment of wood used in the
manufacturing process. Most of the wooden furniture that SHH manufacture
is exported to the United States.Furniture company had been encountering a robust growth stage after the recovery of the US economy. Furniture company started to pick up in the end of 2013 with more encouraging order in the 1H of 2014. The furniture craze had been strong and is one of the dominating topic in 2014.
A quick look up on the following furniture or furniture related company.
1.) Latitude Tree Holdings Berhad
NTA: RM 3.05
2. Poh Huat Resources Holdings Berhad
NTA: 1.55
NTA: RM 0.44
NTA 1.07
While
most of the company had been trading near/above their NTA valuation
(except for Hevea), SHH might be still a comparatively good furniture
company that had a great potential in the coming up days ahead. Let's
have a quick look at their latest 3Q FYE 2014 result.
Based
on the 3Q cumulative outlook, SHH had saw a significant increased in
it's revenue, with a 13 cents EPS and a NTA of RM 1.47. SHH had also
been displaying a strong steady foothold of cash that had been
increasing in quite a drastic manner with decreasing debts. SHH had saw more than 100% of increase in their cash level from 31/12/2012 to 31/03/2014. Currently, SHH is sitting on a cash pile of RM 23million, equivalent of RM 0.46 cash value per share.
SHH
better margin had been contributed by it's in-house processing of the
timbers and woods, which had been a definite boost for the company
operation profits.
Coming up catalyst
SHH
had been mainly exporting their products to the US. While their order
books had not return into the glorious days before the then 1997 Asian
Financial Crisis, the current bullish and robust economy in US had
been in an encouraging note as SHH will be looking to see a break
through in the coming days after their order had picked up in a drastic
manner in the 1H of 2014. According to industry sources, SHH had seen strong order and sitting on a rather huge unbilled sales that will be recognized in the 4Q of 2014.
SHH might be looking to see their revenue breaking above RM 30m for 4Q
2014, and registering their FYE 2014 revenue above RM 100m. SHH might be
looking to chalk above an EPS of 16 cents for FYE 2014, translate to a
value of RM 1.28 per share if traded at a skeptical PER of x8.
I believe SHH will be an interesting company to be invested in based on
- Increasing cash level on the past 6 quarters
- Sitting on RM 23 million cash pile, or RM 0.46 cash per share (Based on 49,997,500 shares)
-
Trading at a 35% from it's NTA of RM 1.45, while most of it's peer had
traded above or near to their NTA, with Homeritz traded at 80% above
it's NTA of RM 0.44
- Encouraging economy from the US as US undergo a bullish state of economy after Feds commitment to keep the interest rate low.
- Strong coming 4Q 2014 with stronger revenue and recognizing unbilled sales done in 1H 2014.
- Undervalued land & properties with properties valuation done back at 1994 to 1996.
SHH
will be looking to see challenge above RM 1.00 in a confident manner. A
quick short term outlook will place SHH at RM 1.10, while a longer term
outlook will see SHH putting a foothold at around RM 1.30 to RM 1.40 in
the coming days.
Bone's short term TP: RM 1.10
Cheers and have a nice day
Regards,
Bone
http://bonescythe.blogspot.com
