March 27, 2015 : 11:47 AM MYT
Ekowood International Bhd (+ve)
SHARES for hardwood flooring manufacturer, Ekowood (Fundamental: 1.05/3 Valuation: 1.2/3) gained nearly 11.3% yesterday to close at 24.5 sen. Over 5.8 million shares changed hands, well above the longer-term daily average of 233,773 shares.
Most furniture stocks have done well, thanks to the weaker ringgit and appreciating overseas demand. However, Ekowood reported gloomy results last month.
Indeed, the company has been in the red since the global financial crisis. Net loss totaled RM6.7 million last year. Revenue continued to decline y-y due to the downsizing of operations in Europe and higher discounts given to customers.
It has shifted focus to the domestic market, now about 39% of total sales, since demand collapsed in Europe, previously its main market. It has also been selling more to the US and Asian markets. The strategy has, however, yet to yield results.
Ekowood is 67.5% owned by plantation company, TSH Resources .
This article first appeared in The Edge Financial Daily, on March 27, 2015.
http://www.theedgemarkets.com
