In our previous article, we mentioned that exporting counter
will benefit from strong USD,
As per 28/8/2018, USD is still trading at RM4.10 level which well above the
comfortable level of RM4.0.
As what we mentioned in the previous article, we mentioned
that our top 3 counters will be:
1.
Wegmans
2.
Homeritz
3.
Evergreen
Wegmans had announce their quarter result with flying
colours where BCF wrote about them after the result and they had hit their historical high today.
Last week, Evergreen had also announced their quarter result
which looks like quite good if compare to their previous quarter and also the
corresponding quarter. However, when we look closer at all the quarters, then we feels
like the result is just average only.
The profit of the company is only coming back to their
average level and it is still far away from its previous high and this doesn't show much growth. This is also the reason for the share price to come down.
However, we found some interesting thing in the commentary
column.
As we can see, Evergreen mentioned that their Segamat
particle board plant is in full commercial run, however, the average selling
prices of the product are lower.
As we know, 1 of the most important raw material for
furniture is particle board. As a result, we can see that the cost of raw
material furniture is not at the high side, hence the furniture player will be
the beneficiary of the low average selling price of particle board.
From the info given, we are assured that particle board
producer are beneficiary of the strong USD however, we believe furniture counters
will benefit most as they not only benefit from the strong USD but also from
the low raw material cost. As a result, BCF believe that furniture counter will
be the top pick for this strong USD trend instead of particle board counters.
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