AN UNDERVALUED GEM, TRADING AT 48% DISCOUNT TO NTA !!!
DPS RESOURCES BERHAD (DPS - Stock Code 7198).
BASIC INFORMATION ABOUT DPS
DPS is primarily engaged in the activity of manufacturing and trading of furniture. The group manufactures and trades home furniture, roof trusses, provision of saw milling, kiln-drying and wood treatment services.
Manufacturing and trading segment contributes major portion to the revenue of the company. The group’s operations are carried out in Malaysia, and internationally, of which majority of the revenue is derived from Malaysia.
It is also involved in the business of timber and fruit and crop plantations. It operates in Malaysia, Europe, the United States, Asia Pacific, the Middle East, and Africa.
Market Capitalization : RM 68 million
Shares Float : 587 million
PE : Only 4.71
NTA : 0.22 (Currently trading at 48% discount to NTA), NTA QoQ increased by 10%
EPS : 2.44 cents
Website : http://shantawood.com.my/about-us/
Gann Support (EP/CL): 0.11/0.09 | Resistance : 0.13/0.15
- 24 NOV: Eksport kayu utama dan produk kayu tempatan mencatatkan perubahan positif selepas Amerika Syarikat (AS) meningkatkan jumlah pembelian sebanyak 53 peratus berjumlah RM5.1 bilion bagi tempoh Januari hingga September lalu.
Menteri Perusahaan, Perladangan dan Komoditi, Datuk Dr Mohd Khairuddin Aman Razali berkata walaupun perang perdagangan antara Amerika Syarikat dan China namun ia memberi kesan dengan peningkatan permintaan daripada AS terhadap produk perabot negara.
- Wooden Furniture Market size valued at USD 420.8 billion in 2019 and is projected to grow at a steady CAGR of 5.7% from 2020 to 2026. Expanding infrastructural development coupled with supportive funding for housing projects by the government sector is likely to create potential market growth opportunities. Rapid growth of population in conjunction with urbanization is positively influencing the adoption of wooden furniture. Easy availability of low-cost wooden furniture on account of intense competition is propelling the demand.
Rapid economic growth, increasing disposable income, and easier availability of land at lower cost will create ample opportunities for the wooden furniture market growth. Furthermore, improving living standards and economic conditions are prominently augmenting the demand for wooden furniture. Advanced interior designs for modern residential buildings along with availability of economical labor in emerging nations is bolstering the industry growth.
Furniture Market revenue to cross USD 750 billion by 2026: Global Market Insights, Inc.
The furniture market demand from commercial application is projected to grow at 5.8% growth rate during 2020 to 2026 owing to the growing demand for furniture, especially in office establishments along with rapid urbanization & globalization across the world.
1. IMPROVING QUARTER RESULTS TRENDS
DPS has announced on Friday, 27 November 2020 a whooping 624.1% increased in PAT YoY & 495.78% QoQ.
Revenue QoQ increased by 46.24% whilst YoY increased by 58.69
With the strong future demand growth of the furniture industry going forward particularly wooden furnitures , I anticipate DPS should be in a stronger footing.This would be a positive boost for investor confidence in company business.
Shantawood has been a known brand name internationally since 1991. The Company, Shantawood Sdn Bhd, was incorporated as a private limited company in Malaysia under the Companies Act, 1965 on 9 April, 1991 and it is a wholly owned subsidiary company of DPS Resources Berhad, a public listed company listed on main board of Bursa Securities Malaysia Berhad. Shantawood is an integrated factory with a built up area of more than 400,000 sq ft built on 15 acres of land and have a workforce of approximate 600 people.
Over the years, Shantawood expanded and became one of the largest manufacturers of various wood-based products such as dining sets, occasional sets, bedroom sets and other occasional sets in Malaysia for export market. Today, Shantawood is the largest chair producer in Malaysia with a record of more than 3 million units of chair production a year.
Considering all the above, I gather that current price for DPS is attractive due to:
i) Improving QR prospects as wooden furniture demand is robust and should recovers strongly from COVID19 going forward
ii) DPS share price is currently trading at discount of 48% to its NTA
iii) Heavy collections seen at 0.110 – 0.115 during past weeks ONLY awaiting BREAKOUT of 0.130.
iv) Most furniture stocks on Bursa Malaysia & elsewhere has rallied namely SYF, EURO, HOMERIZ, LATITUTE, HEVEA, POHUAT, SPRING,WEGMAN etc
LET’S SEE HOW THE SHARE PRICE MOVEMENT IN THE NEAR FUTURE FORBEARING ANY GOOD CORPORATE NEWS.
Disclaimer : The above opinion is never intended to be a BUY CALL whatsoever. I am sharing my observations ONLY based on fundamental; past history; current trading pattern; charts etc. Please make your own informed decision before buying this share or whatever share for that matter.