FLBHD (5197)

Focus Lumber Berhad

FLBHD was incorporated in Malaysia on 30 October 1989 as a private limited liability company and was subsequently listed on the Main Board of Bursa Securities on 28 April 2011. Their principal activities are manufacturing and sale of plywood, veneer and Laminated Veneer Lumber (“LVL”), and investment holding. Plywood is the core product, generating the bulk of the Group’s revenue.

FLBHD plywood manufacturing mill is located at Keningau, Sabah. Over the years, with the vast experience and strong technical capabilities and know-how, we have become a major player in the plywood industry. FLBHD also emphases on environmentally friendly manufacturing and it was the first Malaysian plywood mill company certified as a CARB Certified Manufacturer on 2 October, 2008 by Professional Service Industries, Inc., a CARB authorized third party certifier. The CARB standards regulate formaldehyde emissions from wood products sold in California or used to make finished goods for sale in California. In additions, it was also awarded with the JAS certification by the Ministry of Agriculture, Forestry and Fisheries of Japan in 2009 as a proven qualified plywood manufacturer. JAS imposes stringent requirements on various aspects of production process. The JAS certification signifies the acknowledgement and endorsement of the high quality of the Group’s product which will enhance customers’ confidence.

In Jan 2013, FLBHD was accredited as a certified Lacey Compliant Wood Products Manufacturer by Benchmark International, LLC (BMH) under the BMH Lacey Compliance Verification (LCV) Program, affirming the legality of sourced forest products used in the manufacture of FLBHD products. BMH is an independent third party auditors who assist wood products manufacturers and importers in proving that their source of forest products are legal as required by the Lacey Act, which was passed by the US Congress in 1900 and 2008, by adding the protection of plants and plant products. This certification will give our US customers a higher degree of confidence and helps protect them from heavy civil and criminal penalties that can result from violating the Lacey Act. 

Focus Lumber Service supply Domestic & Foreign Hardwoods.

products & services include

• Plywood

Their main product which contributed more than 90% of our total revenue for the past 3 years.Commonly used in various industries such as the Recreational Vehicle (‘RV’), home decorating, construction and furniture industries.

• Veneer

Veneer is a thin sheet of wood which used to form the building blocks of plywood.

• Laminated Veneer Lumber

The production of Laminated Veneer Lumber commenced in March 2010.They use recycled wood chips & veneer slips to produce like products whereby use multiple layers of thin wood and veneer assembled with adhesives. This product is extremely strong in nature. It is commonly used in the construction industry for structural integrity, production of high-value furniture, housing materials & value-added products. Separate market of its own as compared to thin panel plywood and target market are the US, Taiwan and Japan.

With 97.8% of FLBHD's revenue in 2014 derived from exports and a significant 64.9% of sales going to the US, the company stands to benefit from both the strong US economic growth momentum and USD.

Focus Lumber has been steadily growing for the past 4 years. Dividend per share increased from 6 sen in 2011 - 2012 to 8 sen in 2013 - 2014, giving a generous yield of 6.3%. Its dividend payout ratio was 51.5% in 2014.

The company has a strong balance sheet with net cash of RM 73.8 mil which equivalent to 72 sen per share.

UOBKH target price RM 2.05

Disclaimer:

All posts and documents submitted in this blog are solely for open discussion and education purposes only. All recommendations and opinion provided are solely for your consideration only and you should exercise your own judgment in forming your own investment decision(s). Please also be informed that equity investment is risky and we recommend you to conduct sufficient searches for information in addition to referring our recommendations and/or opinion herein, prior to making an investment decision.

You should take full responsibility of your investment decision(s) and we accept no liability whatsoever for any direct or consequential loss arising from any use of our recommendations and/or opinion provided herein or any solicitations of an offer to buy or sell any securities. Comments and opinions forwarded/provided by members/followers of this blog do not belong to the Admin and we take no responsibility of such.