Sunday, November 23, 2014

Homeritz (Net Cash, Good Dividend & Earnings Growth)

It is a manufacturer of upholstered home furniture – dining chairs, sofas and bed frames – under Original Design and OEM. Almost all of its products are exported to over 40 countries. Key markets are Asia, Australia, Europe and US.

Its revenue growth annually from rm90 million in FYAug 2011 to rm113 million in FY2013 while net profit increased an outsized 40% from rm10.8 million to rm15.1 million during this period. Operating margins has been expanding on economies of scale and increased productivity and efficiency.

For FY2014 the company posted revenue of rm126.8 million boosted by recovery in demand from the eurozone. Net profit was rm20.3 million, a significant 34.3% increased from the previous year.

It also stands to gain from the strengthening in USD as an exporter.

It trades at a trailing 12 month PER of 7.9 times. ROE is high at 24.5%, It has a net cash of rm50 million. That is equivalent to 24.5 sen per share.

It offers good yields. It has a minimum 40% dividend payout policy.

Investors can look forward to increasing dividends in the future, in line with earnings growth.

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Please note that all data given are merely blogger's opinion. It is strongly recommended that you do your own analysis and research before investing.