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Last updated: December 2018

Young Investors

Case Study February 2014: HeveaBoard Berhad

HeveaBoard and its subsidiaries manufacture, trade and distribute a wide range of particleboard and particleboard-based products. HeveaBoard takes the lead in the manufacturing of particleboard - a reconstituted wood panel derived from rubberwood residues, while its subsidiaries are involved in down stream particleboard based Ready-to-Assemble furniture manufacturing, trading and distribution of particleboard and wood panel related products.

Revenue and Profit

Hevea’s has recorded steady revenue. While its profits drop at FY2011 (The drop of net profit is due to weakened US Dollar exchange against the Ringgit, as more than 80% of the Group's revenues were for the export market transacted in US Dollar. Source: Annual Report) but recover at FY2012.

Revenue and Profit
FYRevenue ('000)Revenue GrowthNet Profit ('000)Net Profit GrowthNet Profit Margin
2009 RM327,417 - RM19,077 - 5.83%
2010 RM363,137 10.91% RM26,033 36.46% 7.17%
2011 RM373,049 2.73% RM3,362 -87.09% 0.90%
2012 RM372,597 -0.12% RM15,240 353.30% 4.09%
Editor Speaks

Hevea’s net profit and net profit margin has decreased substantially in FY2011 which due to the same factor above. US Dollar is currently strengthened back against Malaysia Ringgit. We expect Net Profit will back to normal and even better.

Current Ratio

Current Ratio
Year 2009 2010 2011 2012
Current Assets (RM'000) 102,332 139,487 129,653 134,941
Current Liabilities (RM'000) 79,520 99,401 102,488 111,494
Current Ratio 1.3 1.4 1.3 1.2
Editor Speaks

Hevea’s has maintained its current ratio slightly below healthy level of 1.5. Current ratio decreased due to increase in liabilities.

Editor Looks Further

Dividends

For those concerned about dividend payouts, Hevea’s only paid RM0.01 in FY2012.

PE Ratio

Hevea’s PE Ratio has maintain at “attractive” level, from 5.45 in FY2009, 3.99 in FY2010, 30.92 in FY2011, to 6.82 in FY2012.

Some Good News
  1. Hevea is Malaysia's largest integrated particle board manufacturer.
  2. In June 2013, it has secured a RM22mil contract from Boloni, China's leading provider of home furniture solutions. Source: TheStar Business
Some Bad News
  1. Revenue are mostly derived in US Dollar, fluctuate in exchange rate might increase risk of the company.

Editor Delves Deeper

Cash Flow
Year 2011 2012
Net Cash Generated from Operating (RM'000) 35,751 43,278
Net Cash Generated from Investing (RM'000) -10,487 -3,667
Net Cash Generated from Financing (RM'000) -34,330 -28,835
Cash and Cash Equivalents at End (RM'000) 12,814 23,591
Cash Flow

Hevea’s has kept its record in generating positive cash flow from operating activities.

Editor Speaks

Our team expect US dollar to continue strengthen against Malaysia Ringgit and hence we forecast this will contribute positively to the company. Besides, the company is expecting to increase export to China which also increase net profit for the company.

By the Young Investors Team