2022-05-11 03:37:12
Technical tracker - HLIB Retail Research – 11 May 2022
EVERGRN: Brace for a rebound
ASPs continue its upward trajectory. On the back of robust demand, we gather that EVERGRN’s ASP is still on a positive trend, albeit growing at a slower pace amid higher transport costs as a result of elevated oil prices. Adhesive cost (which makes up 20-25% of the group cost of production), on the other hand, remains flattish QoQ due to stable urea prices. Despite anticipating potential uptick bias in the adhesive cost going forward due to the Russia-Ukraine war, we reckon the rise could be mitigated through cost passing or adjustment to its glue formulation to improve glue efficiency in the production of panel boards.
Weakening Ringgit. As c.60% of EVERGRN’s sales are denominated in USD, while most of its cost are in local currencies, we reckon that the recent weakening Ringgit will bode well for EVERGRN. To recap, USD/MYR has appreciated 5% YTD from 4.16 to 4.38 yesterday as the Fed's hawkish stance and surging US 10Y bond yield triggered a rout in emerging market currencies. We expect export-oriented stock such as EVERGRN will come to the limelight in anticipation of stronger USD amid Fed’s aggressive tightening campaign (vs more measured rate hikes by BNM).
Anticipate a robust FY21-23 EPS CAGR of 74%. Despite facing near term headwinds mainly caused by prolonged bad weather as well as global macro events, we are not overly concerned as these challenges are not structural or permanent in nature. We believe Evergreen is well positioned to overcome these challenges due to its well-integrated operations, diversified production bases, as well as riding on a positive momentum driven by recovering demand in the panel board and furniture market. Based on our projection, the group is supported by a robust FY21-23 EPS CAGR of 74% and an undemanding valuation of 7x FY23 P/E (-41% vs 5Y avg 12x).
Hammer pattern. Mirroring the global markets’ selloff in the last two weeks, EVERGN’s share prices had lost 11.8% from a 52-week high of RM0.80 to RM0.705 yesterday. Taking cue from the hammer candlestick pattern with share prices closed above the critical support line, we reckon EVERGRN will experience a rebound going forward, targeting RM0.75-0.80-0.87 zones. Supports are pegged at RM0.64-0.68. Cut lost at RM0.62.
Collection range: RM0.64-0.68-0.705
Upside targets: RM0.75-0.80-0.87
Cut: RM0.62
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EVERGRN：股价准备反弹
平均销售价继续上涨。在强劲需求的背景下，我们发现 EVERGRN 的平均销售价(ASP) 仍处于积极的上涨趋势，但因油价上涨导致运输成本上升从而上涨得较温和。另一方面，粘合剂成本（占集团生产成本的 20-25%）的价格按季度持平。虽然胶粘剂成本预计未来将可能因俄乌战争而上升，但我们认为EVERGRN可以通过转移成本或调整胶水配方以提高面板生产中的胶水效率来缓解成本的上涨。
令吉走弱。由于 EVERGRN 约 60% 的销售额以美元计价，而其大部分成本以当地货币计价，我们认为最近令吉走弱对 EVERGRN 来说是个利好。回顾一下，由于美联储的鹰派立场和美国 10 年期债券收益率飙升引发新兴市场货币暴跌，美元兑马币年初至今已从 4.16 走弱 5% 至 4.38。我们预计 EVERGRN 等以出口为导向的公司将成为焦点，因为在美联储积极收紧政策的情况下，美元将持续走强（相对于 BNM 更加谨慎的加息）。
预计 21-23 财年每股收益复合年增长率强劲，为 74%。尽管面临长期恶劣天气和全球宏观事件造成的不利因素，但我们并不过分担心，因为这些挑战本质上不是结构性的或永久性的。我们相信凭借其良好的整合运营、多元化的生产基地，以及在板材和家具市场需求复苏的推动下，能够很好地克服这些挑战。根据我们的预测，该集团FY21-23 每股收益复合年增长率高达74%和FY23 P/E 7 倍的估值（-41% vs 5年 平均 12x）。
锤子形态。反映过去两周全球市场的抛售情况，EVERGN 的股价从 52 周高点 RM0.80 跌至 RM0.705 ，跌幅达 11.8%。在股价收于关键支撑线上方并形成锤子形态中，我们认为 EVERGRN 将经历反弹，目标为 RM0.75-0.80-0.87 区域。支撑位在 RM0.64-0.68。投资者可把止损设置在在 RM0.62。
买入范围：RM0.64-0.68-0.705
上行目标：RM0.75-0.80-0.87
止损：RM0.62
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