$HOMERIZ / 5160 (HOMERITZ CORPORATION BERHAD)
Research by Public
Neutral – Target Price RM0.58

“Momentum Going Strong”

Homeritz’s 2QFY24 headline net profit increased by 65.9% YoY to RM9.2m, primarily attributed to higher sales volume across all regions. After adjusting for non-core items, Homeritz’s core net profit came in at RM7.9m (+49.2% YoY). Results were above both our and consensus estimates at 63% and 59% respectively. The discrepancy in our forecast was due to the higher-than-expected sales volume, primarily driven by the acquisition of new clientele from the group's proactive engagement in furniture exhibitions in Germany, Vietnam, and Guangzhou. We gather that sales from the US market are picking up but the orders remain relatively small. All told, we revise up our earnings forecasts by an average of 16% for FY24F-26F, to factor in higher sales volume with acquisition of new customers. We reiterate our Neutral call on Homeritz, with a higher TP of RM0.58 based on a 9x PE multiple.

Analyst:
Thye May Ting
thye.mayting@publicinvestbank.com.my