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Focus Lumber Berhad 5197

The company was incorporated in Malaysia on 30 October 1989 as a private limited liability company and was subsequently listed on the Main Board of Bursa Securities on 28 April 2011. The company's principall activities are manufacturing and sale of plywood, veneer and Laminated Veneer Lumber (“LVL”), and investment holding. Plywood is the core product, generating the bulk of the Group’s revenue.

Fundamental Analysis
Year (RM ,000)
2015
2016
2017
2018
Inventories
25,912
27,692
19,700
42,293
Total Asset
146,776
159,764
171,485
182,811
Total Liabilities
12,459
23,301
14,153
14,308
Total Equity
159,235
183,065
185,638
197,119
Net Cash
46,200
35,568
33,924
51,417
From the Annual report of Focus Lumber Berhad, we can notice that there is an increased of both inventories and net cash as compare to the data from year 2015 to year 2017. In Financial Year end 2018, It has recorded 51 million net cash which is higher than 2015 (46.2 million) where the stock price of focus lumber which touched RM2.90 per share



From the graph above, it can be seen that the Net Cash is improving and had recorded a 42 million worth of inventories in Financial year 2018.
Year (RM ,000)
2015
2016
2017
2018
Revenue
180,733
201,476
176,000
203,427
Cost of Sales
124,571
148,218
156,695
159,877
Net Profit
31,722
19,181
12,402
28,416
Profit Margin
17.6%
9.5%
7.0%
14.0%
Dividend (Cent)
15
6
-
16
Dividend Yield (%)
9.43%
3.77%
0.00%
10.06%
EPS (Cent)
29.93
18.10
11.70
26.81
PE Ratio
5.313
8.787
13.590
5.931
Net Asset per share
1.38
1.51
1.62
1.72

From the income statement of Focus Lumber Berhad, the net profit of financial year has been improved as compare to financial year end 2016 and 2017. A total of 16 cent dividend which is the highest among 2015 to 2016 which prove the strength of the cash flow of Focus Lumber Berhad.

Segmental Revenue Informatiion
 
Year (RM,000)
2018
% of Total Revenue
2017
% of Total Revenue
 
USA
154,983
77%
129,180
73%
Korea
20,569
10%
26,409
15%
Thailand
6,012
3%
3,383
2%
Taiwan
6,209
3%
12,214
7%

Based on the segmental revenue information, 77% of the total revenue in  the financial year 2018 are comes from USA, 10% from Korea, followed by Thailand and Taiwan where both contribute around 3%.

As compare to financial year 2017, the percentage of revenue contributed from USA have increased to 77% (RM 154 million) from 73% (RM 129 million) while the revenue from Korea have decreased from 15% (RM 26 million) of the total revenue to 10% (RM20 million)


From the USD/MYR currency exchange rate, 2015 is a year where the USD to MYR conversion rate has hit 1 USD= RM 4.30 which is good for furniture export counter like Focus Lumber Berhad. During 2015 financial year, Focus Lumber Berhad has recorded a highest net profit where the USD is strong. Based on the USD/MYR chart attached above, USD is getting stronger which is good for a export counter like Focus Lumber.



In the B3. Prospect for the financial year in 2018 Q4, the concerns of the management due to the weakening of US dollar can be solved as US dollar has been strengthen recently. The profit margin of the company should be better as a result of this.

Technical Analysis



From technical analysis wise, Focus Lumber Berhad have developed an uptrend channel, based on the chart attached. You can notice that Focus Lumber Berhad have been forming several Higher High and also Higher Low and currently it stayed on the uptrend support line which indicated on L4 circled in the chart shown above.

Moreover, Focus Lumber Berhad have been standing strong above Moving Average 200 proving some strength in the price movement.

Conclusion

Focus Lumber Berhad ,a net cash company which gives high dividend to the investor. With the recent strengthening of US Dollar which will improve the profit margin of the company. In addition of the uptrend of the stock price of Focus Lumber Berhad, it’s definitely a good time to monitor this hidden gem.

Telegram public group : https://t.me/newbietradingchannel

Disclaimer: The stock discussed is just for research purpose and no buy call/ sell call are recommended. All investors are advised to conduct their own independent research into individual stocks before making a purchase decision. Any loss/profit will not be responsible by any person.

 
https://klse.i3investor.com/blogs/newbietradingchannel/205100.jsp

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