This article first appeared in The Edge Financial Daily, on December 2, 2015.

Federal Furniture Holdings (M) Bhd (-ve)

Shares of FFHB (Fundamental: 1/3, Valuation: 0.5/3) gained 5.4% to close at 68 sen yesterday, after announcing strong 3Q2015 earnings results. Some 1.1 million shares changed hands, compared to its average 200-day volume of 55,958 shares. 

For 3Q2015, net profit rose more than 23-fold to RM2.3 million on the back of a 71.1% increase in revenue to RM28.2 million. The increase was mainly attributed to higher contribution from the manufacturing segment as a result of increased exports to Starbucks in Japan, Korea and the ASEAN region.

FFHB is primarily involved in interior fit-out, furniture manufacturing, and trading and retailing of kitchen and appliances. Its interior fit-out projects include the Ritz-Carlton and Mandarin Oriental hotels in Kuala Lumpur as well as Istana Melawati in Putrajaya.

At end-September, FFHB had net debt of RM7.6 million, or net gearing of 18%. The stock trades at a trailing 12-month P/E of 22 times and 1.3 times book.