Homeritz shares up 3% after Insider Asia says firm undervalued

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KUALA LUMPUR: Homeritz Corp Bhd’s share price rose as much as 3% after Insider Asia said the furniture manufacturer’s shares were undervalued. The research firm said Homeritz shares were trading at a trailing 12-month price-earnings ratio of 7.9 times.

“(Homeritz’s) valuations are fairly attractive,” Insider Asia said in a report, which was published in The Edge Financial Daily and theedgemarkets.com yesterday.

Homeritz’s share price rose as much as 2.5 sen to 83.5 sen before easing to close up 1.5 sen at 82.5 sen yesterday, with 404,000 shares changing hands. Its market capitalisation stood at RM165 million.

According to Insider Asia, Homeritz has seen steady growth and high dividend yield. Homeritz’s revenue increased from RM89.8 million in the financial year ended Aug 31, 2011 (FY11) to RM112.9 million in FY13. Net profit rose from RM10.8 million to RM15.1 million during the period. In FY14, the company’s revenue rose to RM126.8 million, while net profit was higher at RM20.3 million.

“The company has proposed a final dividend of 3.1 sen, subject to shareholders’ approval, for FY14. This brings total dividends for the financial year to 5.1 sen per share — up from 3.75 sen in FY13 — or about 50% of net profit.

 

This article first appeared in The Edge Financial Daily, on November 21, 2014.