HHGROUP (0175)- A Better 2015

 HENG HUAT was incorporated in Malaysia under the Act on 25 November 2011 as a private limited company under the name of Heng Huat Resources Group Sdn Bhd. The company were subsequently converted into a public limited company and assumed the present name on 18 June 2012 to facilitate our listing on the ACE Market. 
The company are principally involved in the manufacturer, trading of biomass material and value-added products focusing on oil palm EFB fibre, coconut fibre and value-added products. They are also a manufacturer and distributor of our own brands of mattress and bedding accessories.

The company listed on 25 July last year with IPO price 45sen per share, in the first day trading the share price surge up to 62sen and close at 56sen.

The company gross profit margin in 2014 drops mainly due to higher raw material price for biomass segment and listing expenses around Rm1.87mil in Q3 2014. Excluding the listing expenses, the company earning in Q3 2014 will be Rm3.1m which around 1.6sen eps.

The company targeted a revenue growth of 30% in FY2015 and intend to give a dividend pay out ratio of 20% of the total earning.

Approximately 55% of the group's products are exported to china and this may benefited to the company due to weakening in Ringgit

The construction in Gua Musang expected to start its construction in Q3 2015 which will increase their oil palm fibre production capacity.

The company also expected to transfer to mainboard in second half this year

The company share price has break up the 6months resistance of 0.515 today, and looking to go further if can sustain above 0.515.


With an average quarterly earning of 1.6sen and full year earning  6.4sen EPS, current PE is 8.125 times.

Short Term TP: 55sen  (PE:8.59)
Medium Term TP: 60sen (PE:9.375)


Happy Trading!

Regards,
Nick