PETALING JAYA: Evergreen Fibreboard Bhd is looking to increase its sales to East Asia as it reduces reliance on the Red Sea shipping lane due to heightened geopolitical tensions.
Besides its new export market of Japan, Evergreen has also begun engaging with customers from Australia and New Zealand with regards to its downstream and ready-to-assemble products.
This development is viewed positively by Hong Leong Investment Bank (HLIB)Research as it sees the group continuing to diversify its customer base and reducing the risk of concentrating on any one substantial export market.
Its revenue in the first quarter of 2024 dipped slightly quarter-on-quarter due to a seasonally weaker quarter. Revenue increased year-on-year thanks to higher sales volumes and average selling prices from all segments.
Looking ahead, the group’s prospects are showing signs of further improvement on the back of the resilient Middle East market sustaining demand for panel boards.
The improvement is also led by new export markets and customers from reducing its reliance on the Red Sea shipping lane, as well as trade diversion from Western customers due to heightened scrutiny on Chinese imports.
The research house has maintained its “buy’’ call on the stock with a higher target price of 48 sen per share from 42 sen.