Trump policies to impact furniture players including Poh Huat Resources 

PETALING JAYA: Uncertainties arising from policies under US president Donald Trump’s administration may pose a significant concern for the furniture industry, according to TA Research.

The research house said Poh Huat Resources Holdings Bhd saw a quarterly profit decline of 20% to RM8.5mil despite a revenue increase of 3.9% to RM136.3mil for the first quarter ended Jan 31, 2025.

TA Research said its quarterly profit came in within expectations, accounting for 20.1% and 21.2% of its own and consensus full-year estimates.

The decrease was mainly due to a lower gross margin, resulting from higher material and overhead costs in its Vietnam operations. The pre-tax profit for its Vietnam operations declined by 79.7% to RM1.1mil.

The revenue increase was attributed to a seasonal peak in shipments ahead of the festive seasons.

The drag down by its Vietnam operations were cushioned by higher revenue growth in its domestic operations, driven by increased demand for office furniture.

“As a result, Malaysia’s operations recorded a 39.6% increase in profit before tax to RM11.4mil. The furniture maker’s balance sheet remains solid, with zero debt and a net cash position of RM288.7mil,” it said.

TA Research said it would maintain its financial year 2025 (FY25) to FY27 forecast but trim the target price earnings from nine times to seven times to account for potential policy risks from the Trump administration.

“After rolling forward our valuation base year to calendar year 2026 (CY26), we revised the target price from RM1.40 to RM1.25, based on a price earnings multiple of seven times CY26 earnings per share,” it said.

It also maintained a “hold” call on the stock but said the healthy balance sheet of the furniture maker would assist it in getting past the negative headwinds.

In its financial report, the group noted that the furniture industry in the United States was not only being impacted by trade policies but also housing market fluctuations, consumer behaviour shifts and broader economic factors.