KUALA LUMPUR (July 2): Furniture makers staged a share price rally recently on multiple factors such as stronger US dollar (US$), potential expansion plans in the pipelines and paying dividends.

Checks have revealed several furniture stocks have been trading at the uptrend since June 15 this year, which saw their share price surged between the range of 8.6% and 28.9% in the past two weeks.

Evergreen Fibreboard Bhd led the gain, which saw its share price appreciated almost 28.9% to RM1.47, from RM1.14 since middle of last month.

It was followed by Lii Hen Industries Bhd, which saw its share price climb to its all time high of RM5.30 today, with appreciation of 18.7% during the period.

As at noon break, Poh Huat Resources Holdings Bhd was traded RM2.15, up three sen or 1.42%, for a market capitalisation of RM232.66 million.

Meanwhile, Homeritz Corporation Bhd finished the morning trading session at RM1.51, gaininh five sen or 3.42%, with a market capitalisation of RM308 million.

Signature International Bhd settled at RM2.74, up six sen or 2.24% for a market capitalisation of RM326.28 million.

Analysts told theedgemarkets.com that the main factor contributing to the share price rally was strengthening of greenback, which credits positive to all furniture makers.

"On top of that, investors are also bullish on the expansion plans of some furniture makers," they added.

Year-to-date, the greenback has gained 8.05% against Ringgit. The US dollar continued to appreciate by 0.79% today to trade at RM3.7780.

CIMB analyst Marcus Chan said, "Ringgit [was trading] at 3.7000 against the greenback, those who are benefit [from this] are those who exporting in US dollar, and their cost is ringgit dominated."

With this currency rates, he said furniture makers can enjoy full benefits of exchange rates without seeing any increase in cost, as their cost is mainly ringgit dominated.

"Unlike electrical and electronics (E&E) industry, they have certain imports [raw material] trading in US$," he added.

Chan also noted rubber prices has declined more than 50% since over the past three years, which is also benefiting furniture makers, whose manufacturing rubber wood furniture.

Another analyst, who declined to be named, said furniture makers are exporting their goods to overseas and majority of the transactions are US$ dominated.

"Therefore, they are benefiting from the stronger USD," he said.

Aside from the forex, he pointed out that investors also closely watch on expansion plans that furniture makers have in the pipelines.

Citing Homeritz as an example, he said investors were bullish over Homeritz's acquisition of the remaining 35% stake in Embrace Industries Sdn Bhd (EISB), which allow the group to consolidate revenue and profit of EISB.

"Post acquisition, we raised Homeritz's financial year 2015 (FY15) and financial year 2016 (FY16) forecasts by 3%-18.5%, to reflect positive impact of the acquisition," he said.

He said Homeritz was now trading at 12 to 13 times of its 12 month trailing earnings, which is slightly expensive, as compared to other peers.

"With the net cash position [that] the company has, it remains as a stock [which] investors should look at," he said.

Another analyst, who declined to be named, said Poh Huat Resources Holdings Bhd, was the beneficiary of strong US$, given that two-thirds of the group's market was dominated by the United States.

"With the strengthening of US$ and the improved demand and from the US, I believe Poh Huat could continue to benefit from the current situation," he said.

"The stock was relatively undervalued, trading at less than 7 times of its price to earnings ratio (P/E), which is deemed as an attractive stock. [as] compared to others," he added.

He pointed out that Poh Huat declared a 3 sen dividend its second financial quarter ended April 30, 2015 (1QFY15). This has also attracted investors' interest.

Poh Huat did not declare dividend in the last corresponding quarter. However, it paid a total of 8 sen dividend for the financial year 2014 (FY14).