As you know, there is so much publicity on property development companies. As a result, almost all property shares are fully valued. Fortunately very few analysts cover the furniture business.
As I have been accumulating Latitude and became a substantial shareholder a few months ago. To satisfy my own ego, I have been telling all the people I know to buy. As shown on the above chart, the price has risen from Rm 1.00 to Rm 5.30 within 18 months.
Of course, many have sold and laughed all the way to the bank and many also ask me if the price will continue to rise, bearing in mind that since its 2nd Q result announcement on 12th Feb the price went up 24 sen and 30 sen in the last two trading days respectively. WHY?
Its 1st Q EPS was 17.12 sen and 2nd Q EPS was 28.19 = 45.31 sen.
As 100% of its products are sold outside Malaysia and due to our Ringgit weakness, I believe its 2nd half year profit will be as good as the 1st half, if not better. Its full year EPS will be about Rm 1.00 which you will know for sure it in about 6 months. Latitude is the largest furniture manufacturer in Malaysia with more than 20 years of experience. It has 3 factories in Johore, 2 factories in Vietnam and one in Thailand. The last closing price was Rm 5.30 at about P/E= 5. With such good profit growth prospect, I think it is still cheap.
Koon Yew Yin 21st Feb 2015
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