KUALA LUMPUR (Nov 20): Homeritz Corp Bhd rose as much as 3% after Insider Asia said the furniture manufacturer's shares were undervalued.
Insider Asia said in a report Homeritz shares was trading at a trailing 12-month price-earnings ratio (PER) of 7.9 times. Bloomberg data showed that the sector's average PER stood at about 62 times.
Insider Asia said: "(Homeritz's) Valuations are fairly attractive."
Homeritz rose as much as 2.5 sen to 83.5 sen before reducing gains. At 11.02am, the stock rose 1.5 sen or 1.85% to 82.5 sen with 179,400 shares changed hands.
Insider Asia's report is published in The Edge Financial Daily and theedgemarkets.com
According to Insider Asia, Homeritz has seen steady growth and high dividend yield.
Homeritz’s revenue had increased from RM89.8 million in financial year (FY) ended August 31, 2011 to RM112.9 million in FY13. Net profit rose from RM10.8 million to RM15.1 million during the period.
In FY14, the company's revenue rose to RM126.8 million while net profit was higher at RM20.3 million.
"The company has proposed a final dividend of 3.1 sen, subject to shareholders' approval, for FY14. This brings total dividends for the financial year to 5.1 sen per share — up from 3.75 sen in FY13 — or about 50% of net profit.
"This earns shareholders a higher than market average net yield of 6.4%," Insider Asia said.
Insider Asia noted that Homeritz's demand outlook was positive, and the company stood to gain from the strengthening of the US dollar as an exporter.
Homeritz exports most of its products to over 40 countries. Its key markets include Asia, Australia, Europe and the US.