Evergreen, seen as beneficiary of strong US dollar, rises 3%

Evergreen, seen as beneficiary of strong US dollar, rises 3%
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KUALA LUMPUR (Sept 8): Shares in Evergreen Fibreboard Bhd advanced in morning trade on Thursday (Sept 8), after it was seen as a beneficiary of a strong US dollar.

At 9.49am, Evergreen had added 3.09% or 1.5 sen to 50 sen, with 959,800 shares traded.

Hong Leong Investment Bank (HLIB) Research has maintained its “buy” rating of Evergreen at 48.5 sen, with a lower target price of 82 sen (from 96 sen), based on nine times price-earnings of mid-financial year ending Dec 31, 2023 (FY23) earnings per share of 9.1 sen.

The research house said it anticipates Evergreen’s second-half performance to be similar to the first half of the year, with its Thai and Indonesian segments sustaining their strong performance, on the back of continued robust demand from the Middle East and Indonesian markets, while its Malaysian operations are expected to continue facing near-term headwinds from a log shortage, increased operating costs and tapering demand from local furniture makers.

In a note on Thursday, the research house nonetheless said that with the group’s overall demand outlook remaining robust, coupled with current strength in the greenback, Evergreen remains a compelling investment case. In addition, its strong operating cash flow, coupled with no major capital expenditure in sight, should culminate in a decent dividend payout for FY22.