KLCI Stock - HOMERIZ / 5160 - 2012 Quarter 4

HOMERITZ CORPORATION BERHAD


Company Description

HOMERITZ CORPORATION BERHAD is an integrated original design manufacturer (ODM) and original equipment manufacturer (OEM) with a range of upholstered home furniture products. As an ODM, the Company designs and manufactures furniture for its customers whereas, as an OEM, Homeritz manufactures furniture based on designs provided to it. The Company's wholly owned subsidiaries include Home Upholstery Industries Sdn Bhd and U.S. Furniture Manufacturing Sdn Bhd (USF). USF is engaged in investment holding. The Company's products include upholstered sofas, upholstered dining chairs, upholstered bed frames, dining tables and sofa beds.

Company Info 

Listing Date	2010-02-19
IPO Price	0.65
Market Capital (Capital Size)	67,000,000 (Very Small)
Par Value	RM 0.20
Board	Main
Sector	Consumer Products
Major Industry	Home Furniture Products
Sub Industry	Furniture & Flooring - Wood & Others
Website	http://www.eritz.com.my/

My Analysis 

Forecast P/E now	(0.335-0.03)/0.0809 = 3.77 (Moderate)
Target Price	0.36+0.03 = 0.39 (PE 4.5, EPS 0.0809, DPS 0.03)
Decision	BUY for dividend as long as still above SMA100
Comment	Revenue increased 24.5% and also higher than preceding year corresponding quarter 11.6%, eps increased 90.6% and was second consecutive quarter increasing and also higher than preceding year corresponding quarter 44.9%, cash generated from operating more than enough to cover all expenses, operating margin improving to 22% all time high, liquidity ratio indicate Group is firm position to meet current obligation and high dividend, gearing ratio indicate low liabilities risk, receivables collection and payables repayment perid is good and generate free cash flow from inventory
First Support Price	0.3
Second Support Price	0.27
Risk Rating	MODERATE

Accounting Ratio 

Return on Equity	22.62%
Dividend Yield	8.96%
Operating Profit Margin	22.89%
Net Profit Margin	22.76%
Tax Rate	5.01%
Asset Turnover	1.1302
Net Asset Value Per Share	0.36
Net Tangible Asset per share	0.36
Price/Net Tangible Asset Per Share	0.85
Cash Per Share	0.12
Liquidity Current Ratio	5.9514
Liquidity Quick Ratio	3.4927
Liquidity Cash Ratio	2.6215
Gearing Debt to Equity Ratio	0.198
Gearing Debt to Asset Ratio	0.1578
Working capital per thousand Ringgit sale	44.8%
Days to sell the inventory	98
Days to collect the receivables	29
Days to pay the payables	32

Technical Analysis 

SMA 10	0.336 (Downtrend)
SMA 20	0.322 (Uptrend 32 days)
SMA 50	0.305 (Uptrend)
SMA 100	0.299 (Uptrend)
SMA 200	0.285 (Same)
MACD (26d/12d)	0.009456 ( 0.000319 )
Signal (9)	0.009098 ( 9e-005 )
MACD Histogram	0.000358 (Bullish trend 15 days)
Bolinger Upper Band	0.359
Bolinger Lower Band	0.285

My notes based on 2012 quarter 4 report (number in '000):-
- Higher revenue and pbt was attributed to an increase in volume of product sold and strengthening of US Dollars against Ringgit Malaysia as well as better economic of scale

- Estimate next 4Q eps after 2012 Q4 result announced = 14700*1.1/200000 = 0.0809, estimate PE on current price 0.335 = 3.77(DPS 0.03)
- Estimate next 4Q eps after 2012 Q3 result announced = 72215*0.16/200000 = 0.0578, estimate highest/lowest PE = 5.18/4.4 (DPS 0.0255)
- Estimate next 4Q eps after 2012 Q2 result announced = 68607*0.18/200000 = 0.0617, estimate highest/lowest PE = 5.23/3.69 (DPS 0.0225)
- Estimate next 4Q eps after 2012 Q1 result announced = 68514*0.15/200000 = 0.0514, estimate highest/lowest PE = 6.08/4.72 (DPS 0.0225)
- Estimate next 4Q eps after 2011 Q4 result announced = 0.0196*4 = 0.0784, estimate highest/lowest PE = 3.83/2.93 (DPS 0.02)
- Estimate next 4Q eps after 2011 Q3 result announced = 0.0088*4*1.05 = 0.037, estimate highest/lowest PE = 7.57/4.86 (DPS 0.02)
- Estimate next 4Q eps after 2011 Q2 result announced = (0.0172+0.0085)*2 = 0.0514, estimate highest/lowest PE = 7.2/4.67 (DPS 0.02)
- Estimate next 4Q eps after 2011 Q1 result announced = 0.0172*4*1.05 = 0.0722(revenue incrreased, improved balance sheet), estimate highest/lowest PE = 6.09/4.57 (DPS 0.04)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.0207*4 = 0.0828, estimate highest/lowest PE = 7/4.29 (DPS 0.04)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.0242*4*0.95 = 0.092, estimate highest/lowest PE = 6.47/4.35 (DPS 0.04)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.0268*4*0.95 = 0.1018, estimate highest/lowest PE = 6.04/4.91 (DPS 0.04)

- In FY2010, revenue recorded RM110 million and profit RM21.7 million
- In FY2009, revenue recorded RM108.4 million and profit RM22.7 million
- In FY2008, revenue recorded RM92.6 million and profit RM12.4 million
- In FY2007, revenue recorded RM73.8 million and profit RM10.5 million

- Revenue regions percentage: Europe-60%, Australasia-26%, North & South America-8%, Others-6%

- Revenue products percentage: Upholstered Sofas-55%, Upholstered Dining Chairs-30%, Upholstered Bed Frames-13%, Others-2%

- Dividend policy envisage not less than 40% of net profit, intends to recommend and distribute at least 50% of net profits

HOMERIZ latest news (English)

HOMERIZ latest news (Chinese)

Financial Quarter Summary

a_date	year	qrt	h_price	l_price	div	roe	c_roe	rev	c_rev	pbt	c_pbt	prof	c_prof	eps	c_eps	asset	c_asset	liab	c_liab	mino	equi	cfo	cfi	cff	cash	fcf	net	final	share	c_share	m_cap	date	oper_m	prof_m	vat	asset_t	pe	navps	ntaps	p/ntaps	cps	l_cur	l_qui	l_cash	g_de	g_da	avg_w	inv_d	rec_d	pay_d
2012-10-29	2012	4	N/A	N/A	0.0225	8.75%	22.62%	28777	103246	6550	17673	5689	14700	0.0284	0.0735	91349	55556	14412	9335	4152	76937	20071	988	6236	11625	19083	12847	24472	200000	200000	61000	2012-08-31	22.89%	22.76%	5.01%	1.1302	4.1497	0.36	0.36	0.85	0.12	5.9514	3.4927	2.6215	0.198	0.1578	44.8%	98	29	32
2012-07-27	2012	3	0.325	0.28	0.0075	4.58%	13.87%	23121	74469	3803	11123	2977	9011	0.0149	0.0451	85397	49672	13182	8055	3619	72215	14798	511	6103	11894	14287	8184	20078	200000	200000	62000	2012-05-31	16.62%	16.45%	5.13%	1.174	-	0.34	0.34	0.91	0.1	6.1666	3.5419	2.4926	0.1922	0.1544	41.5%	91	30	33
2012-04-27	2012	2	0.345	0.25	-	4.40%	9.28%	24485	51348	3573	7320	2860	6034	0.0143	0.0302	84306	48213	15699	10484	2988	68607	8500	303	2671	11813	8197	5526	17339	200000	200000	55000	2012-02-29	14.76%	14.59%	5.04%	1.1534	-	0.33	0.33	0.83	0.09	4.5987	2.4566	1.6539	0.2392	0.1862	38.8%	98	30	29
2012-01-30	2012	1	0.335	0.265	-	4.88%	4.88%	26863	26863	3747	3747	3174	3174	0.0159	0.0159	83155	46548	14641	9339	2455	68514	4749	216	2540	11857	4533	1993	13850	200000	200000	60000	2011-11-30	14.12%	13.95%	5.87%	1.1091	-	0.33	0.33	0.91	0.07	4.9843	2.4184	1.483	0.2216	0.1761	40.3%	109	34	40
2011-10-27	2011	4	0.32	0.25	0.0165	6.84%	18.89%	25783	89826	4529	12036	3914	10811	0.0196	0.0541	82830	45818	17843	12422	2102	64987	4396	8822	3451	19582	4426	7877	11705	200000	200000	50000	2011-08-31	17.76%	17.57%	7.84%	1.0845	4.6249	0.31	0.31	0.81	0.06	3.6885	1.6491	0.9423	0.2837	0.2154	37.2%	119	34	45
2011-07-25	2011	3	0.3	0.2	0.0060	3.07%	12.05%	20107	64043	1906	7507	1756	6897	0.0088	0.0345	75022	40525	14851	9463	-	60171	1180	7282	3722	19600	6102	9824	9776	200000	200000	53000	2011-05-31	9.70%	9.48%	7.87%	1.1715	-	0.3	0.3	0.88	0.05	4.2825	2.0418	1.0331	0.2468	0.198	35.3%	102	37	39
2011-04-25	2011	2	0.39	0.26	-	2.97%	8.98%	19477	43936	1782	5601	1702	5141	0.0085	0.0257	76706	42014	18291	12779	-	58415	3177	6613	222	19594	3436	3658	15936	200000	200000	82000	2011-02-28	9.38%	9.15%	4.49%	1.2169	-	0.29	0.29	1.41	0.08	3.2877	1.6641	1.247	0.3131	0.2385	31.3%	97	19	38
2011-01-28	2011	1	0.48	0.37	-	6.01%	6.01%	24459	24459	3819	3819	3439	3439	0.0172	0.0172	74466	43537	13553	7938	-	60913	2741	2869	95	19654	128	223	19431	200000	200000	94000	2010-11-30	15.79%	15.61%	9.95%	1.3934	-	0.3	0.3	1.57	0.1	5.4846	3.5553	2.4478	0.2225	0.182	34.3%	66	31	32
2010-10-27	2010	4	0.62	0.395	0.021	N/A	N/A	23846	109969	4585	21689	4137	20055	0.0207	0.1215	72845	44545	15601	10161	-	57244	16145	1889	15247	20585	14256	991	19594	200000	165116	122000	2010-08-31	19.40%	19.23%	9.77%	1.5096	5.0222	0.35	0.35	1.74	0.1	4.3839	2.6604	1.9284	0.2725	0.2142	31.3%	73	25	40
2010-07-26	2010	3	0.635	0.44	-	N/A	N/A	25564	86123	5068	17104	4832	15918	0.0242	0.1038	69380	41785	16273	10756	-	53107	10748	832	11568	20732	9916	1652	19080	200000	153361	97000	2010-05-31	20.03%	19.82%	4.66%	1.2413	-	0.35	0.35	1.39	0.1	3.8848	2.4639	1.7739	0.3064	0.2345	36.0%	81	31	33
2010-04-29	2010	2	0.655	0.45	0.018	N/A	N/A	29895	60559	5648	12036	5173	11086	0.0268	0.0855	72308	44480	20409	13141	-	51899	9507	661	6980	20737	8846	1866	22603	192700	129604	105985	2010-02-28	19.11%	18.89%	8.41%	0.8375	-	0.4	0.4	1.37	0.12	3.3848	2.4294	1.72	0.3932	0.2823	51.7%	-	56	N/A
2010-02-17	2010	1	0.705	0.54	0.012	N/A	N/A	30664	30664	6388	6388	5913	5913	0.0879	0.0879	73558	45730	29273	21898	-	44285	4099	193	39	20696	3906	3945	24641	67301	67301	N/A	2009-11-30	21.06%	20.83%	7.44%	0.4169	-	0.66	0.66	N/A	0.37	2.0883	1.5105	1.1253	0.661	0.398	77.7%	-	100	N/A

Financial Quarter Balance Sheet

year	qrt	Goodwill on consolidation (A-0)	Prepaid lease payments (A-0)	Property, plant and equipment (A-0)	Cash and cash equivalents (A-1)	Current tax assets (A-1)	Derivative financial assets (A-1)	Inventories (A-1)	Trade receivables (A-1)	Deferred tax liabilities (L-0)	Loans & borrowings (L-0)	Current tax liabilities (L-1)	Derivative financial liabilities (L-1)	Dividend payable (L-1)	Loans & borrowings (L-1)	Trade and other payables (L-1)	Minority interest (M-1)
2012	4	478	-	35315	24472	-	-	22952	8132	2403	2674	43	44	1500	380	7368	4152
2012	3	478	-	35247	20078	127	-	21142	8325	2365	2762	-	226	-	425	7404	3619
2012	2	478	-	35615	17339	130	167	22458	8119	2365	2850	-	-	3300	470	6714	2988
2012	1	478	-	36129	13850	118	-	23963	8617	2365	2937	-	636	-	514	8189	2455
2011	4	478	-	36534	11705	197	309	25333	8274	2365	3056	-	-	1200	1734	9488	2102
2011	3	-	-	34497	9776	426	127	21203	8993	2198	3190	-	-	-	1344	8119	-
2011	2	-	-	34692	15936	256	95	20748	4979	2198	3314	-	-	4200	519	8060	-
2011	1	-	-	30929	19431	-	-	15315	8791	2168	3447	13	104	-	512	7309	-
2010	4	-	-	28300	19594	-	-	17513	7438	2088	3352	227	-	-	325	9609	-
2010	3	-	1171	26424	19080	-	-	15283	7422	2090	3427	524	-	3600	329	6303	-
2010	2	-	1175	26653	22603	-	-	12555	9322	2060	5208	1254	-	2400	456	9031	-
2010	1	-	1178	26650	24641	-	-	12653	8436	2060	5315	1046	-	12000	465	8387	-

Financial Quarter Income Statement

year	qrt	Revenue	Income tax expense	Finance/interest costs	Other income	Administrative/Operating expenses	Minority interest
2012	4	28777	328	38	393	22582	533
2012	3	23121	195	40	101	19379	631
2012	2	24485	180	41	128	20999	533
2012	1	26863	220	47	416	23485	353
2011	4	25783	355	50	241	21445	260
2011	3	20107	150	44	64	18221	-
2011	2	19477	80	45	122	17772	-
2011	1	24459	380	43	112	20709	-
2010	4	23846	448	41	176	19396	-
2010	3	25564	236	53	80	20523	-
2010	2	29895	475	65	17	24199	-
2010	1	30664	475	71	40	24245	-

Short form reference
a_date = announcement date, yr = financial year end, qrt = quarter
h_price = stock highest price during the quarter, l_price = stock lowest price during the quarter
div = dividend recommend or declare in the quarter, roe = return on equity
c_roe = cumulative of return on equity during the financial year
rev = revenue in the current quarter, c_rev = cumulative of revenue during the financial year
pbt = profit before tax in the current quarter, c_pbt = cumulative of profit before tax during the financial year
eps = earnings per share in the current quarter, c_eps = cumulative of earnings per share during the financial year
asset = total asset, liab = total liability, mino = minority interest, equi = total equity
cfo = net cash flow from operating activities, cfi = net cash flow from investing activities
cff = net cash flow from financing activities, cash = cash and cash equivalents as at beginning of financial year
final = cash and cash equivalents as at current financial period ended
share = diluted/basic weighted average number of ordinary shares
c_share = cumulative of diluted/basic weighted average number of ordinary shares during the financial year
m_cap = market capital at announcement date of quarterly report, date = current financial period ended date
prof_m = profit margin, vat = income tax rate, pe = price earning per share ratio of recent four quarter
navps = net asset value per share, ntaps = net tangible asset per share, cps = cash per share
l_cur = liquidity current ratio, l_qui = liquidity quick ratio, l_cash = liquidity cash ratio
g_de = gearing debt to equity ratio, g_da = gearing debt to assets ratio
avg_w = working capital per thousand Ringgit sale
inv_d = days to sell the inventory, rec_d = days to collect the receivables
pay_d = days to pay the payables

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