White Horse - an long term opportunity?

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In my earlier few posts, I discussed about the recovery in the Bursa Malaysia construction companies and property sector.

Logically, the recovery will benefit the building materials supplier. In this post, I looked at White Horse. This is one of the biggest ceramic tile manufacturer in SEA. It had been incurring losses for the past few years as shown below.

[Image: Whitehorse-performance-index.png]

You can see that the losses pre-date the pandemic years. This was because the Malaysian property and construction sectors were already facing soft markets long before Covid-19. The impact was that White Horse had been operating below its break-even levels leading to losses. 

[Image: Whitehorse-breakeven.png]

In such a situation, if a company cannot increase the sale volume or selling prices, what is left is cost cutting. This is what White Horse did. 

Today it has a much leaner operations than 5 years ago. As such, as its sales volume picks up following the recovery in the construction and property sectors, I would expect its performance to improve.

But you need a long-term view. This is not a stock for the punters. 

If you want to know more about the company and my investment thesis, go to Is White Horse one of the better Bursa Malaysia stocks?

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