[%XGGx%]
Research by Public Investment Bank
Underperform - Target Price RM0.175

"Weaker Furniture Demand"

Wegmans’ 1QFY23 headline net profit fell by 96% YoY to RM0.2m, dragged by weaker furniture exports especially to the North America region. After adjusting for gain on foreign exchange, Wegmans turned into a core net loss of RM0.1m, which was below our expectations. The discrepancy in our forecast was mainly due to the lower-than-expected furniture demand. We slash our earnings forecast by 30-43% for FY23-25F, mainly to account for the weaker demand given the rising interest rates environment. In view of the challenging operating environment for furniture manufacturers, we downgrade our call on Wegmans to Underperform, with a lower TP of RM0.15 based on a PE multiple of 8x FY24F EPS.

Analyst:
Wong Ling Ling
[%NaZu%]

$KLSE-WEGMANS
Research by Public Investment Bank
Underperform - Target Price RM0.175

"Weaker Furniture Demand"

Wegmans’ 1QFY23 headline net profit fell by 96% YoY to RM0.2m, dragged by weaker furniture exports especially to the North America region. After adjusting for gain on foreign exchange, Wegmans turned into a core net loss of RM0.1m, which was below our expectations. The discrepancy in our forecast was mainly due to the lower-than-expected furniture demand. We slash our earnings forecast by 30-43% for FY23-25F, mainly to account for the weaker demand given the rising interest rates environment. In view of the challenging operating environment for furniture manufacturers, we downgrade our call on Wegmans to Underperform, with a lower TP of RM0.15 based on a PE multiple of 8x FY24F EPS.

Analyst:
Wong Ling Ling
wong.lingling@publicinvestbank.com.my

$WEGMANS / 0197 (WEGMANS HOLDINGS BERHAD)