However, its net profit went the other way as it declined every year without fail since listed.
|Long term borrowings||151.7|
|Short term borrowings||54.3|
In year 2008, the demand and price of particleboard fell drastically while the cost went up.
Actually after just one year of listing in FY2005, its net debt/equity ratio already reached 1.0x.
Now many investors are chasing Hevea and its share price has reached RM2.00 again.
Looking back retrospectively, I think investors should be brave enough to grab Hevea shares at below 10sen in 2009, as its NTA was at RM1.56 and we can't expect the margin and demand for particleboard to stay low forever.
Despite the debts issue and lower profits, its revenue was actually quite good throughout the years.
The lessons learned from Hevea:
- Massive business expansion is not always good
- High gearing is a real risk in economy downturn
- Always keep alert on the trend of demand and cost