KUALA LUMPUR (July 21): CIMB Research has initiated coverage on Evergreen Fibreboard Bhd with an “Add” rating at RM1.82 and target price of RM2.90 and said Evergreen was one of Asia’s leading medium-density fibreboard (MDF) manufacturers.
In a note July 20, the research house said that after difficult years in 2012-14, Evergreen was poised for an extraordinary turnaround from FY15 onwards, driven by a strong dollar, falling raw material costs and internal restructuring.
“We initiate coverage on Evergreen with an Add rating and target price of RM2.90 (60% upside).
“We value Evergreen at FY16 P/E of 12.5x, in line with the MDF/PB sector average. 2015-2016 should see a strong re-rating as investors reward US dollar plays.
“With the potential sale of non-core assets, Evergreen has room to raise dividends substantially over the next two years,” it said.