PETALING JAYA: Particle board manufacturer Heveaboard Bhd’s ready-to-assemble (RTA) sales volume is expected to normalise in the second quarter of this year, driven by a seasonally stronger first quarter.

       Despite the weakening yen in Heveaboard’s main export market of Japan, Hong Leong Investment Bank Research (HLIB) said the average selling price in the second quarter remained firm.

       “The stronger dollar will benefit Heveaboard greatly as more than 90% of its revenue is denominated in dollars, while almost all the costs are in ringgit,” the research house said in a report yesterday.

       HLIB noted that rubber wood cost remained stable.

       “We expect another commendable second quarter for Heveaboard, while there is a potential upside in the second half of 2022, should the company manage to build up a stable rubber wood supply and avert any further production halt.”

       HeaveaBoard's raw materials to make boards

       HLIB also said the potential arrival of foreign labour could significantly scale up the RTA capacity.

       “Main downside risks to our earnings forecast include bad weather, which could disrupt the supply of rubber wood.”

       During the first quarter of 2022, Heveaboard had to stop the production of particle boards for a month to build up its rubber wood inventory.