$HOMERIZ / 5160 (HOMERITZ CORPORATION BERHAD): Waiting for a Catalyst
$HOMERIZ / 5160 (HOMERITZ CORPORATION BERHAD) has announced its Q2FY24 result on April 26th. Here are some updates.
1. Income Statement
- YoY
Revenue posted at RM57.57mil, increased by 44.64%. While PBT posted at RM11.44mil, 66.53% increased. The increase in revenue and PBT are attributed by increased in volume sold and the strength of USD.
- QoQ
Revenue has increased by 7.09% while PBT has decreased by 6.98% as the decreased of PBT is mainly due to high one-off operating expense incurred in this quarter.
2. Balance Sheet
The company's cash reserves total RM183.86 million, translating to RM0.40 per share. With the current share price at RM0.585, approximately 68% of the company's market capitalization consists of cash.
3. Cash Flow
Positive FCF of RM9.68mil.
4. Management Outlook
Increasing in production costs and fluctuation of Forex are the challenges to the company.
5. Personal Opinion
While the company has achieved impressive results, it's important to consider both the strengths and weaknesses of the organization.
馃憤 Strengths
馃搷Robust Cash Reserves: The company maintains a consistently growing cash position, with cash per share reaching RM0.40 this quarter.
馃搷Resilient Operations: Since its listing, the company has never incurred a quarterly loss, demonstrating stability even during the pandemic.
馃搷Unique Brand Advantage: With its proprietary brand, the company is minimally impacted by fluctuations in the China furniture market and is difficult to replace.
馃憥 Weaknesses
馃搷Insufficient Growth: With minimal capital expenditure each quarter, it appears that the management lacked a commitment to expanding the business.
馃搷Reduced Dividend: Despite higher profits in FY23 compared to FY19, the company's dividend payout was lower. In FY23, the dividend payout ratio was only 29%, down from 41% in FY19, resulting in a current dividend yield of only 2.74%.
馃搷Absence of Catalysts: To invigorate the stock price, the company should consider issuing a special dividend since there is lot of cash in the company.
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