PETALING JAYA: The worst is likely over for Poh Huat Resources Holdings, which sank into the red in its fourth quarter ended Oct 31, 2021 due to Covid-19-induced lockdowns.

       The furniture maker is expected to see a recovery in earnings in the coming quarters, as its key markets reopened following the easing of Covid-19 cases.

       TA Research, which is optimistic on the prospects of Poh Huat, reiterated its “buy” call on the group’s shares, with an unchanged target price of RM1.84, based on unchanged nine times forward earnings.

       “We believe the worst could be over for Poh Huat, given that its manufacturing plants have gradually resumed operations following the relaxation of movement restrictions in both Malaysia and Vietnam,” the brokerage said in its report.

       Poh Huat Furniture

       “Hence, we expect the group to register more robust earnings moving forward,” it added.

       Poh Huat registered a net loss of RM3.54mil in the fourth quarter of 2021 compared with a net profit of RM25.62mil in the corresponding quarter a year earlier.

       During the period in review, its revenue declined to RM53.05mil from RM216.72mil previously.

       For the full year, it posted a net profit of RM32.22mil compared with a net profit of RM51.91mil in the financial year 2020 (FY20), while revenue dropped to RM554.74mil from RM659.51mil.

       During the year in review, Poh Huat saw reduced revenue contribution from its Vietnam operations.

       This is due to the temporary suspension of its manufacturing plant following the implementation of movement restrictions by the Vietnamese government.