Company Backgroup:

Comfort Rubber Glove (CRG)  previously known as Integrated Rubber Corporation Berhad (IRCB), offer wide range of nitrile and latex gloves beside powdered and powder free examination gloves in different length and color for different application. Currently CRG’s gloves are exported to the Northern American, Oceanic Countries, Middle East Countries, Europe, South America, Africa and Asia-Pacific region

Share Price Movement:

COMFORT share price raised to 0.99 about a year ago due to robust global expansion growth as they recorded better quarter report one after another. The share started to rolled down beginning of this year as their first quarter report resulted in a loss due to fire outbreak in their factory and warehouse in Taiping. The share price hit bottom at 0.61 and then bounced back as next quarter report back to profit plus insurance claim. People seem to forget about their growth story as the share price lingering around 0.70. Then, the latest quarter report which was out 2 days ago recorded a highest revenue and net profit.  

Positive:

1)      Expansion of new production lines that complete end of 2016 will up 35% production.

          Expansion also involve new manufacturing facility, packing and warehousing facility, and laboratory facilities.

2)      Growing demand of their speciality glove.

3)      Earning in USD.

Negative:

1)      Competitive product prices

2)       Labor minimum wages raised on July 2016

The latest quarter report not only suggest their growth story remains intact but their management is doing a great job by having better production planning and process optimisation that should permanently surpass the concern of minimum wages hikes.

Glove stocks PE normally trade between 15-25 and with current price of 0.695, the PE is in lower range of 15 (TopGlov = 21, Kossan = 22, Harta = 29). A growing company like COMFORT deserve a better valuation. Even we annuallize the 8M profit with PE15, the share price should worth 0.86.

Trade at own risk,

Hopefully, AllWin