Business Background
- Lii Hen Industries Berhad is an export oriented furniture company.
- Their export revenue accounted as high as 93% of the total revenue.
- Through its subsidiaries, the Company is engaged in the manufacture of wooden furniture and kiln-drying of rubber wood and timber.
- The Company offers office and residential products such as bedroom set, occasional, utility, sofa set, buffet and hutch, dining, entertainment unit and living room.
Board of Directors
- Chua Lee Seng
- Executive Director
- Co-founder of Lii Hen Furniture Sdn Bhd
- Aged 65, Malaysian (2015)
- Appointed to the board of Lii Hen Industries Berhad on 24 May 1994
- Chua Yong Haup
- Managing Director
- Aged 48, Malaysian (2015)
- Appointed to the board of Lii Hen Industries Berhad on 30 December 1999
- Tan Bee Eng
- Executive Director
- Aged 57, Malaysian (2015)
- Appointed to the board of Lii Hen Industries Berhad on 30 December 1999
- Tok Heng Leong
- Executive Director
- Aged 58, Malaysian (2015)
- Appointed to the board of Lii Hen Industries Berhad on 24 May 1994
Financial Highlights
- Revenue, Profit, EPS and net assets per share all time high contributed by stronger USD
- Net assets per share growing consistently throughout the years
- Low profit in 2011 due to weaker USD but recovered in 2012
- Increasing dividend since FY07 except FY11 (weaker USD)
Comparison with peers
- According to Kenanga Research, Lii Hen has the highest total return of 55.1% in compare with others
SWOT
- Strengths
- Healthy balance sheet. The company is in net cash position.
- Dividend paid in FYE 2014 has increased by 32.14% compare to previous year.
- Weaknesses
- No official expansion plans.
- Opportunities
- TPPA opening up new markets for furniture companies to the 11 member countries.
- Exports to drive sales growth.
- Riding on dollar-driven margin expansion.
- Threats
- Weak market sentiments.
- Escalating of production and labour costs in the local front.
- The rebound of crude oil will strengthen MYR against USD.
Conclusion
Lii Hen Industries Bhd is an export oriented furniture company which benefits from USD. Their export revenue accounted as high as 93% of the total revenue, third after SHH (100%) and Homeritz (99%). For those who did not follow the news, MYR has depreciated from RM3.2 per 1USD to RM4.2 per 1USD since mid of 2014. This is a huge boost to those export oriented companies.However, the major concern of investors with these USD benefited companies is the rebound of crude oil price. So when will the crude oil rebound? Is it the bottom yet? I doubt anyone that could answer that precisely. If someone could, he/she might be richer than Warren Buffett.
Lii Hen is a company with good fundamentals. So even if crude oil rebounded or MYR appreciated, their share price most likely will drop instead of dive. Therefore, there is still time for you to make adjustment if the day comes. In my opinions, it is safe to buy or hold Lii Hen as long MYR/USD is above RM3.80.
p.s. Koon Yew Yin is holding about 9.5% of the total shares of Liihen (Annual Report 2014)
https://stockhuat.wordpress.com/2016/02/20/liihen-7089/
