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64 comment(s). Last comment by secret2win at Aug 23, 2020 6:27 PM
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freetospeak
5817 posts

Posted by freetospeak > Aug 22, 2020 10:17 PM | Report Abuse

Sifu prob...got number to c clearer.if not hard to comprehend for layman.


probability
12332 posts

Posted by probability > Aug 22, 2020 10:24 PM | Report Abuse

ok let me try...may be tomorrow i post here if i could put in an easily understandable manner...

for now we can see below for TG:

https://klse.i3investor.com/servlets/stk/fin/7113.jsp

on second qtr of 2020, at 9% PAT margin, its EPS was 4.52

I try to see the effects of increasing margin to 12% and then raise sales by 40%....i got roughly 40 cents EPS only...

This is of course assuming TG maintains 100% at OEM sales price

A good place to check these on the Analyst Briefing of Supermax dated 9th Aug page 13 (the first 2 bar giving data for pre-covid ASP)


probability
12332 posts

Posted by probability > Aug 22, 2020 10:56 PM | Report Abuse

sorry sifu free, using your posting basis, with OEM having 1/3 of the OBM margin, TG will be deriving 1/3 of the above profit.

As such, extrapolated for its capacity expansion by 40%, its EPS will be 80 cents per annum (before bonus issue).

Its TP will be double the below value estimated earlier



Posted by probability > Aug 22, 2020 9:38 PM | Report Abuse X

To me what is interesting in this presentation of Post Covid scenario is..

at OEM margin of 12% used by free on above derivations, Top Glove with say an additional throughput of 40% (capacity expansion by 2022), will be having an EPS of around 40 cents per annum only (before Bonus issue)..

Even with PE 80, Top Glove TP = RM 32 (before bonus issue)

.......


It shows how conservatively the above TP for supermax had been derived..


JBond007
845 posts

Posted by JBond007 > Aug 22, 2020 11:02 PM | Report Abuse

So happy to see this article.
Freetospeak you really are our Top Gun.


freetospeak
5817 posts

Posted by freetospeak > Aug 23, 2020 7:06 AM | Report Abuse

Thanks sifu prob...appreciate your input...


pjseow
735 posts

Posted by pjseow > Aug 23, 2020 7:31 AM | Report Abuse

Thank you freetospeak for your write up. I agree that Supermx should be reevaluated and accorded a higher PE on par with Topglove amd Harta with its OBM distribution channels which had proven to reap the benefits .The last.qtr result with 43% margin showed that supermx OBM model plus marketing restructuring with higher allocation to OBM and cutting off agents and middlemen yield a more superior margins than the other top 3 glove makers.


pjseow
735 posts

Posted by pjseow > Aug 23, 2020 7:33 AM | Report Abuse

Thank you freetospeak for your write up. I agree that Supermx should be reevaluated and accorded a higher PE on par with Topglove amd Harta with its OBM distribution channels which had proven to reap the benefits .The last.qtr result with 43% margin showed that supermx OBM model plus marketing restructuring with higher allocation to OBM and cutting off agents and middlemen yield a more superior margins than the other top 3 glove makers.


newnewbie
23 posts

Posted by newnewbie > Aug 23, 2020 12:47 PM | Report Abuse

Tq Sifus for sharing


FutureGains
8881 posts

Posted by FutureGains > Aug 23, 2020 12:49 PM | Report Abuse

ex after buy


GiantPanda
1355 posts

Posted by GiantPanda > Aug 23, 2020 1:33 PM | Report Abuse

I have just read the third time.

Insightful analysis! Great sharing!!

This is WHY you must own SUPERMX !!!


probability
12332 posts

Posted by probability > Aug 23, 2020 1:43 PM | Report Abuse

At current risk free interest rate of 1.8% and further interest rate cut before end of the year, and the fact that all other businesses will remain depressed until the pandemic is over (2 -3 years time)....you really cant see the interest rate direction reversing again for many years to come....

As such, its possible for Gloves stock like Super to deserve a PE of 40...after all its going to beat Harta's margin edge consistently going forward


pjseow
735 posts

Posted by pjseow > Aug 23, 2020 2:59 PM | Report Abuse

Probability, based on Supermx Q4 2020 result analyst briefing, we can actually estimate the earnings of Q1,Q2,Q3 and Q4 2021.The informations from.slide 4, 9 ,13 and 14 provides pricing ,leadtimes and orders .These info enable us to estimate the increasing earnings of the next 4 qtrs.I estimated the earnings of next 4 qtrs of.approximately 620 million,775 million, 978 million and 1114 million respectively. Total earning for 2021 is 3.5 billion. My assumption is no capacity increase and no cost increase. Strictly based on ASP increase and monthly volume of 2 billion pcs.This translates into rm 2.57 per share.With just a PE of 15, the tgt price is rm 38.6 if we base on FY 2021 earning.


probability
12332 posts

Posted by probability > Aug 23, 2020 3:11 PM | Report Abuse

noted pjseow, i have seen you messages earlier on how delayed they are at realizing these ASPs...due to lead time

thanks for your usual deep analysis

Posted by pjseow > Aug 23, 2020 2:59 PM | Report Abuse

Probability, based on Supermx Q4 2020 result analyst briefing, we can actually estimate the earnings of Q1,Q2,Q3 and Q4 2021.The informations from.slide 4, 9 ,13 and 14 provides pricing ,leadtimes and orders .These info enable us to estimate the increasing earnings of the next 4 qtrs.I estimated the earnings of next 4 qtrs of.approximately 620 million,775 million, 978 million and 1114 million respectively. Total earning for 2021 is 3.5 billion. My assumption is no capacity increase and no cost increase. Strictly based on ASP increase and monthly volume of 2 billion pcs.This translates into rm 2.57 per share.With just a PE of 15, the tgt price is rm 38.6 if we base on FY 2021 earning.


secret2win
840 posts

Posted by secret2win > Aug 23, 2020 6:27 PM | Report Abuse

Very good sharing and valueable

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