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7 hours ago
Eonmetall Group Berhad is a Malaysian-based industrial company specializing in flat steel products and industrial racking systems. The company is vertically integrated, encompassing machinery manufacturing, IT solutions, and renewable biomass ventures.
Six years ago, approximately 50% of Eonmetall's revenue was derived from exports. However, by 2024, this figure had declined to around 33%.
A significant factor contributing to this reduction was the imposition of U.S. anti-dumping duties on Eonmetall's boltless steel shelving units in 2023. This led to a 33% drop in revenue compared to 2022, with exports to the U.S. plummeting from 38% of total revenue in 2022 to just 3% in 2024.
In response to the loss of the U.S. market, Eonmetall focused on expanding its domestic sales. While this strategy helped mitigate some of the revenue loss, the company's total revenue in 2024 remained approximately 25% lower than in 2022.
Despite the revenue challenges, Eonmetall returned to profitability in 2024, achieving a marginal Return on Equity (ROE) of 0.7%. This marks a recovery from the losses experienced in 2023. To regain its pre-2023 average ROE of 8%, the company will likely need to rebuild its export markets and explore new international opportunities.
The market price of Eonmetall's stock has been declining over the past three years, reflecting the company's declining business performance during that period. However, this downturn may not fully account for the potential turnaround, as the stock is currently trading at approximately one-sixth of its book value.
Given the improving performance in 2024 and the company's return to profitability, it appears that the market may have overreacted, potentially presenting an undervaluation opportunity from an asset value perspective. You should not be surprise to see it falling into the Turnaround quadrant in the Fundamental Mapper
Six years ago, approximately 50% of Eonmetall's revenue was derived from exports. However, by 2024, this figure had declined to around 33%.
A significant factor contributing to this reduction was the imposition of U.S. anti-dumping duties on Eonmetall's boltless steel shelving units in 2023. This led to a 33% drop in revenue compared to 2022, with exports to the U.S. plummeting from 38% of total revenue in 2022 to just 3% in 2024.
In response to the loss of the U.S. market, Eonmetall focused on expanding its domestic sales. While this strategy helped mitigate some of the revenue loss, the company's total revenue in 2024 remained approximately 25% lower than in 2022.
Despite the revenue challenges, Eonmetall returned to profitability in 2024, achieving a marginal Return on Equity (ROE) of 0.7%. This marks a recovery from the losses experienced in 2023. To regain its pre-2023 average ROE of 8%, the company will likely need to rebuild its export markets and explore new international opportunities.
The market price of Eonmetall's stock has been declining over the past three years, reflecting the company's declining business performance during that period. However, this downturn may not fully account for the potential turnaround, as the stock is currently trading at approximately one-sixth of its book value.
Given the improving performance in 2024 and the company's return to profitability, it appears that the market may have overreacted, potentially presenting an undervaluation opportunity from an asset value perspective. You should not be surprise to see it falling into the Turnaround quadrant in the Fundamental Mapper