Glove stock performance H1N1 vs COVID-19
BIG 4 Glove Share Price - H1N1 vs COVID-19
In understanding the past we may predict the future with higher level of accuracy. The discovery of COVID-19 vaccine is imminent. This fact obviously worries alot of glove stock investors as the sell down continues since the announcement of Pfizer's mRNA based vaccine a week back.
In this article, I present and compare the past performance of share price and QR of Topglov, Harta, Supermx & Kossan (btw all of this information is actually public info) .
TOPGLOVE
HARTA
SUPERMX
KOSSAN
1. We can see that prices of BIG 4 started to move up even before WHO declare H1N1 as pandemic. I guess this was where the smart money started to flow in.
2. For TOPGLOV, HARTA & SUPERMX, its share price move north aggrresively when WHO eventually declare world-wide pandemic on 11th June-09.
3. Now this is the part that is interesting, on 15th Sep 2009, FDA approved 4 vaccines (and finally the 5th one was on 16 Nov). At this point onwards, the share price of ALL 4 of them rallied more aggresive compare to the time there was no vaccine. The moving up lasted between 8 to 10 months with some correction in between.
4. Fundamentally, if you see the QR reported during the pandemic window, it DOES NOT reflect as strong PAT /margin as what they do now:
a) From at least TOPGLOV & SUPERMX QR notes, they did not indicate of foward selling. Today their inventories are oversold until end 2021.
b). During this period latex prices & crude oil (butaine) were higher than they were today. MYR was also stronger. Hence impact on PAT.
c). Today the glove produciton volume are at least double of where they were in 2009 e.g: Topglove only produce aprpox 30 bil pcs/year, now they are reaching 100 bil.
d). This is common knowledge that COVID-19 hits the world worst than H1N1. Therefore global demand have surged multiple times that of H1N1 era.
5. Eventually when enough masses had been innoculated and WHO declares the end of H1N1 pandemic, prices corrected itself. the QR which all BIG 4 release reflected the decrease in revenue (except HARTA which lasted a while longer).
So the question to ask yourself if you are investing in glove today or you are deciding to cut loss is this....why do you think the price move up north stronger after H1N1 vaccine is approved by FDA in Sep-09? Will history repeat itself? Does the discovery of vaccine or the anticipation that it will be available in Dec or Q1 2021 reduces the demand for glove? What does history teach us?
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TOPGLOVDiscussions
4 people like this. Showing 21 of 21 comments
market perception is cruel to gloves. rather they bet on the unknowns like gaming, banks due to recovery play.
2020-11-16 13:32
Based on history the glove stocks continue to rally even after WHO approved vaccine in Sept 2009. But now the glove revenue has doubled and WHO have not approve any vaccine yet, the glove stocks dropped. Why investors start to sell down glove stocks now and did not do so even after WHO approved the vaccine in 2009?
2020-11-16 14:10
In 2009 you don’t buy stocks with your handphone, now all can use smart phone. Investors are getting smarter loh!
2020-11-16 14:18
@CCCL So trueee investors nowadays are getting smarter cause they use smart phone to buy/sell mah hahaha. Lots of investors these days are new generations of millennials who getting panicked easily
2020-11-16 16:02
Investor not well informed. Another factor is also there are (especially for Topglove & Supermx) Cw expiring this month and Dec-20. IB sell to cover payout as all cw mid June to Dec are ITM and the exercise ratio is still low.
https://www.malaysiawarrants.com.my/tools/warrantsearch?underlying=TOPGLOV&type=all&expiry=all
https://www.malaysiawarrants.com.my/tools/warrantsearch?underlying=SUPERMX&type=all&expiry=all
https://www.malaysiawarrants.com.my/tools/warrantsearch?underlying=HARTA&type=all&expiry=all
https://www.malaysiawarrants.com.my/tools/warrantsearch?underlying=KOSSAN&type=all&expiry=all
2020-11-16 16:31
further explained here
https://klse.i3investor.com/blogs/superbullklse/2020-11-14-story-h1536430109-This_could_be_one_of_the_major_factors_why_glove_counters_are_moving_si.jsp
2020-11-16 16:34
Since call warrants of supermax and top gloves are exspiring soon... IB S ARE PRESSING THE MOTHER SHARE LOWER...THIS PROBELM WAS NOT THERE DURING H1N1 DAYS, NOW IS WORST TOO MUCH OF CALL WARANTS ISSUED BY THIS BANKERS.. WHEN THEY ARE COMING TO NEAR EXSPIRING, THE IB S WILL START PRESSING THE MOTHER SHARE DOWN.. WHY THE SECURITIES COMMISSION HAS NO CONTROL OVER THIS... IT IS VERY UNFAIR TO THOSE WHO ARE INVESTING IN MOTHER SHARES
2020-11-16 19:04
@ebertho,tks for ur details explanation,after dec 20 glove counter still got hope?
2020-11-16 21:55
Yes definitely. If you look during H1N1, glove company only started to report reduced profit after H1N1 no longer pandemic. This is only short term sentiment not good. No one can tell when the price correction will be over. But mid to long term (2 to 3 Q ahead) fundamental is intact if you read their quarterly report release by all of the big 4, customers have wait for orders more than one year. TG & Harta boss also said supply will not meet demand any time soon.
2020-11-16 22:20
@ebertho,i see some of the warrant expiry date al de way down to yr21 march o april,with this hw can de mother share will rise?
2020-11-17 08:29
OTB Based on the above study on H1N1 pandemic in 2009, even though the vaccine is approved by WHO, the share price of Topglov still continues to move up north in the next 10 months.
Currently, WHO has not approved any effective vaccine yet. A lot of talking without proven results.
Please note all vaccines approved by WHO in 2009, none of them is effective until today.
Thank you.
16/11/2020 1:17 PM
CCCL In 2009 you don’t buy stocks with your handphone, now all can use smart phone. Investors are getting smarter loh!
16/11/2020 2:18 PM
I hope Sifu will stop repeating the same de javu story of SARS after vaccine was found...
2020-11-17 08:47
H1N1 is not a pandemic. Covid 19 is. And 10 times worse. at least. Go figure. This pandemic happens once a century. Vaccines will help. But gloves still needed. And big shortage. Stop and think.
2020-11-17 09:44
This is to show that the banks control bursa not sc. Sc is useless bcos this scenario keep repeating. Sc is hopeless and useless.
2020-11-17 09:56
Sohai Bee. h1n1 was under controlled and production of vaccine would not be profitable. That's why you don't comment something beyond your expertise.
2020-11-27 19:30
i noticed in 2009, total eps is RM0.4873, but the price is around rm1 - rm2. if that the case, wah....P/e only 3 to 5 ???
2020-12-09 13:35
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OTB
Based on the above study on H1N1 pandemic in 2009, even though the vaccine is approved by WHO, the share price of Topglov still continues to move up north in the next 10 months.
Currently, WHO has not approved any effective vaccine yet. A lot of talking without proven results.
Please note all vaccines approved by WHO in 2009, none of them is effective until today.
Thank you.
2020-11-16 13:17