The MYR per 1 USD chart shows the average rate for the last 3 months was Rm 4.30 to one USD and the rate on 5th . Feb 2016 was Rm 4.15 to one USD, a 15 sen or 3.5% drop. Smart investors should be able to see that this 3.5% strengthening of our Ringgit should not cause the export manufacturers share prices to drop more about 20%. For example:
VS dropped from Rm 1.68 to Rm 1.32 a drop of 21%. Note 1st Q eps was 5.22 sen.
Focus Lumber dropped from Rm 3.02 to Rm 2.28 a drop of 25%.Note EPS for last 3 Q was 3.22, 7.8 and 9.35 sen respectively. It has no borrowing. Some of its cash saving is in US$.
Chin Well dropped from Rm 2.28 to Rm 1.84 a drop of 19%. Note 1st Q EPS was 6.07 sen.
Latitude dropped from Rm 8.05 to Rm 6.63, a drop of 18%. Note 1st Q EPS 28.95 sen. It has about Rm 200 million cash saving and some portion is in US$ deposit.
Lii Hen dropped from Rm 2.97 to Rm 2.35, a drop of 21%. Note EPS for last 3 Q were 6, 7, and 8.6 sen. It is cash rich and no borrowing.
As I said before, the normal investors always over react to good or bad news and smart investors should take advantage of this phenomenon to make more profit. I strongly believe all these prices will rebound soon when investors see that their quarterly results have not been affected so much. In fact many of these cash rich companies like Focus lumber, Latitude and Lii Hen have fixed deposit in US$.
I wish you all a happy and prosperous Chinese New Year. I sincerely hope all my articles I posted have helped you to make more money and be happier.
