Supermax : It is back in my focus as it is breaking RM3 today. The last time I wrote about her was my old-childhood friend, KC, bought her at RM5 because it was 'cheap'. Her friend working with Supermax said that it is a good buy at RM5 then. Mind you, market was still bullish but glove-stocks continue their down trend. So, she bought at RM5.00, it dived and moving lower each day ...
Supermax Corporation ' Losing its grip in the 2Q. Supermax's 1H11 net profit was below expectations, making up 30% of our full-year forecast and 29% of consensus estimates. The poor results were due to higher input costs and overcapacity. As expected, no dividends were declared. We now slash our FY11-13 EPS numbers by 13-26% as we were overoptimistic about Supermax's ability to pass on costs and maintain margins. Supermax has put its Glove City project on hold, which we believe curbs its growth prospects. As a result, we raise our discount to Top Glove's 13.1x benchmark P/E from 20% to 25%. Our target price falls from RM4.75 to RM3.64, prompting a downgrade of Supermax from Buy to HOLD. While valuations are cheap and input costs have moderated, this is offset by a lack of catalysts and lower growth prospects. We recommend Kossan for its balanced product mix.

Source : Taken from CIMB

Note : This is post no 1700.
TEH