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- Due to the aggressive interest rate hikes in US and euro denting home sales and hence furniture demand, we cut our FY2023/24 forecasts by -15%/-15.1%.
KUALA LUMPUR (Oct 31): Hong Leong Investment Bank (HLIB) Research has downgraded Homeritz Corp Bhd to “hold” at 53.5 sen with a lower target price (TP) of 53 sen (from 69 sen) and said Homeritz’ 4Q2022 core Patami of RM9.5 million (q-o-q: +10.5%; y-o-y: -RM0.1 million) brought the full-year FY2022 sum to RM35.2 million (y-o-y: +73.4%).
In a note on Monday (Oct 31), the research house said the results were within the house (103.2%) but exceeded the consensus (105.7%) full-year forecasts.
“However, due to the aggressive interest rate hikes in US and euro denting home sales and hence furniture demand, we cut our FY2023/24 forecasts by -15%/-15.1%.
“Despite the commendable 4Q2022 results, we opine that demand uncertainty coupled with slowing housing demand as interest rates continue to rise is clouding the earnings visibility for the group.
“Downgrade to 'hold' with a lower TP of 53 sen pegged to a lower P/E multiple of eight times based on FY2023 core EPS of 6.6 sen,” it said.
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