Versalink

Versalink: Malaysian based furniture manufacturer VersaLink delivered a better than expected 1HFY15 results, reporting net profit of RM1.8m (-72.1%) instead of a possible net loss as previously disclosed in its IPO prospectus. Revenue was however down 15.8% to RM32.3m, due to lower revenue from both export and domestic segment, as a result of projects delayed by the end users. Gross margin decreased marginally to 35.9% from 37.8%. Bottom-line was largely weighed by a 70.7% increase in admin expenses to RM5.5m, attributable to fees and expenses in relation to the company’s IPO and higher staff costs. Going forward, the group guides that it is seeing broad-based growth opportunities across its existing key markets. This trend is supported by improving economic fundamentals and is expected to continue into 2015. Other than capitalizing on such trends, the group aspires to become a prominent global player in the long term, and has made several long term investments during the year, which included a brand building exercise by world-renowned marketing and advertising leader, McCann Erickson. At the current price, Versalink trades at 4.3x annualized 1HFY15 P/E.