Highlights

Stevent Hee

Author: StallionInvestment   |   Latest post: Thu, 16 Jul 2020, 9:18 AM

 

GLOVE - SKY IS THE LIMIT?

Author:   |    Publish date:


GLOVE FLY HIGH.. 

SKY is the limit...

 

I guess everyone enjoy the journey of becoming more wealthy during this period of covid-19 which bring oppurtunity to make us to weather the storm during this bad time for business.

Plenty of glove related counter surge up more than 400% to 1000% within this half a a year time.

I guess everyone is eyeing the glove stocks to keep on fly high. At this moment when i pen down this article, there is no single losser for glove related counters investor. This is for sure.

Let take a look what is the target price of the BIG 4 leaders of gloves manufacturer which is HARTA, TOPGLOVE, KOSSAN & SUPERMX.

 

Source obtain from https://klse.i3investor.com/servlets/stk/pt/5168.jsp

 

I guess there is no need i do further coverage on the fundamental perspective how they derive the target price as you can get it by clicking into the research report.

 

So, let me explain from my point of view.

 

Let take a look at this news.

Top Glove chairman and founder, Tan Sri Lim Wee Chai, said that expecting only locals to fill the vacancies was unrealistic, and would reduce Malaysia’s competitiveness.

 

He said they had hired 2,500 local staff and workers last year, which formed part of the company’s 19,000-strong workforce globally.

Despite their recruitment efforts, the current workforce was not sufficient to meet the demand for gloves, which has increased dramatically due to Covid-19.

"Before Covid-19, we were running (at) about 80 to 85 per cent capacity. Now we are running more than 100 per cent. Though we add in new capacity, we are still not able to cope with the demand; the demand is just too strong,” he said.

"So we hope the government will open up (the recruitment process) so that we can reduce the shortage of workers. So hopefully, by Sept 1, after the MCO is over.”

According to the company, the lead time to fulfil orders for gloves was now more than a year - which means if someone ordered gloves today, it would take over a year before the shipment arrives at its destination. Prior to the pandemic, the lead time was between 10 to 60 days.

Source obtain from https://www.thestar.com.my/news/nation/2020/07/12/glove-shortage-will-worsen-if-free-on-foreign-workers-continues-says-top-glove-chairman

What does it mean to me, meaning production run at maximum capacity. There is no way for TOPLGLOVE increase their earning. What ever order they secure is future order, future profit, not current order, current profit.

So, why all those glove related counters shares price surge up, because the demand for glove is strong. How can glove manufacturers increase their profit because there is no way for them to produce more glove.

1. Acquire smaller glove manufacturers at relatively higher cost price, then produce the glove. By doing so, glove manufacturers increase their capacity to produce more gloves.

2. Increase selling price if there is no way of producing more glove.

Can you guys recall when there is shortage of facemask, many manufacturers venture in to facemask business.

Let read some facemask news which happen in the past.

此前几个月,口罩俩字就是金山,只要沾上就能赚钱。但现在,有商家为去库存“赔本赚吆喝”。口罩价格下跌了超3成,熔喷布90级现货已从4月高点42.5万元/吨降至3万元/吨,口罩机打折也难卖。

  “风口下面,往往是悬崖。”上海一家口罩机厂商感叹道,他的业务因近期价格暴跌陷入停滞。

  随着国内疫情逐步得到控制,国内口罩产能也出现了供大于求的局面。卖方市场变为买方市场,被称为“生命之盾”的口罩不再“一罩难求”,价格也大幅下降,有商家为去库存“赔本赚吆喝”。除口罩机外,口罩的主要材料之一熔喷布价格也下滑明显

http://info.texnet.com.cn/detail-810169.html

Will this happen to glove when everyone is rushing for glove and pushing the glove price higher?

I can't give you the answer, what i can do is tell you what happen to the sectors which benefit due to the spread of COVID-19.

Recently, there is 1 new IPO Glove counters go listed at Thailand.

Thai medical glove maker raises $482m in IPO to expand production

 

Sri Trang Gloves, based in the southern province of Songkhla, plans to increase annual production capacity to 50 billion gloves by 2025 and 100 billion by 2032. It now produces around 33 billion gloves annually in three factories.

Source obtain from https://asia.nikkei.com/Business/Health-Care/Thai-medical-glove-maker-raises-482m-in-IPO-to-expand-production

 

 

官方网页: https://www.sritranggloves.com/zh/our-business/process/making-gloves

 

Let read another news which is relevant to glove manufacturer.

根据协议,HL Advance科技将成为首家向市场推介高密度三重前支架的手套浸胶机械制造商,一旦该技术成功商业化,将是最新的手套浸胶机械生产科技。目前,手套公司通常使用单重或双重前支架的手套浸胶机械来生产手套。

徐美君指出,该公司将使用高密度三重前支架技术,测试其商业和技术可行性,并预期未来6到12个月内研发大量生产的方式,才能进一步推广给客户。

合力科技估计,一旦正式采纳高密度三重前支架技术,手套公司能够节省20%至30%的成本,产量也有望增加约30%至50%。

资料来源:https://www.orientaldaily.com.my/news/business/2020/02/17/327207

If this is going to happen in the near time, then production speed able to increase by 30-50%, that will curb the shortage of supply to fight against the pandemic.

So, we forseen the tight supply of glove will be ease within the 2-3 months time.

On top of that, getting more and more people think this is over-value. Just check this out.

Issuer, issue put warrant for glove. Is it going to hedge their position by having put warrant。 Think it for yourself why issue issue put warrant at this price?

 

Source obtain : https://klse.i3investor.com/servlets/stk/pt/7113.jsp

I think the other two TP for the glove manufacturers can be obtain if you search at I3 website.

 

So, if the TP hit as what it stated by the research analyst. What is the next TP? 

Is it we are hoping that there is no end, no cure for COVID 19. Deep in my heart, I hope this virus will get control by this year and vaccine successful develop to save people life.

If this news came out, is it possible we are going to witness huge correction of Glove counters?

I read some article were saying even there is a cure, the hygience level to protect the spread virus will be increasing. I do agree half. Why, because every government over spend to fight this virus. When there is cure, then they should focus on the economy recovery but not the protection. If the government use this money to prevent life loss, i think this is a stupid decision. People also will lose their life if they lose their job. So, focus should be on economy growth to spur the economy and job creation. 

 

What go up , will come down. It is just the matter of time the musical chair going to stop. For me, if i have bought the shares price at low, it is absolutely fine to hold. 

But, people who going to chase, who is going to add position. Think about the upside and the downside. It is wise to add position. Probably you make more if you are right. What if you are wrong, can you take it. 

This is a not a buy/sell recommendation. It just a sentence to remind you to think before you make any decision.

Below is some of my write up or loom video.

 

30 March 2020

Adventa - FACEMASK N95 producer and surgical glove

Link : https://klse.i3investor.com/blogs/SICStockPick/2020-03-30-story-h1485701930-Adventa_FACEMASK_N95_producer_and_surgical_glove.jsp

 

3 July 2020

 

 

高盛喊话美国人戴口罩- TOPGLOVE 和 ADVENTA 都是有生产口罩的公司
资料来源:https://www.loom.com/share/da8e78a718d74465b0818d5f03276af8
 
3 July 2020
 
FACE MASK MANDATING IN US ; TOPGLOVE AND ADVENTA BOTH ARE FACE MASK PRODUCERS
 
 
 
 
 

 

 

TRADE WITH WISDOM

 

FB LINK : https://www.facebook.com/Steventheeinvestment/

TELEGRAM LINK : https://t.me/steventhee628

 

Subcribe Stevent Hee Youtube Channel :

https://www.youtube.com/channel/UCYm446mSdNPaxlSVDCVj7bA

 

 

DISCLAIMER : Trade at your own risk. Above article is merely for educational sharing purpose, it does not solicit any buy/sell recommendation. Kindly consult your dealer/remisier for any investment decision. Writer does not hold any liabilities if any financial losses occur due to your investment you have make.

 

免责声明:买卖自负。以上文章视频纯碎做为个人分享观点,不构成任何买卖意见。在你做出任何投资决定,请向你的股票经纪咨询跟多详情。

 

 

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