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COMMENTS ON SUPERMAX CORPORATION BERHAD (7106) - louisesinvesting
Thursday, November 21, 2019
FIGURE 1: SUPERMAX CORPORATION BERHAD LAST 2 YEARS SHARE PRICE TREND
**analysis based on 2019 annual report.
1. GENERAL INTRO: Supermax is one of the major glove manufacturers in Malaysia.
2. NOTABLE POINTS:
a. in 2019 report, Supermax stated that the company’s products export to 165 countries, in progress building its 12th plant to increase production capacity, plant #13, #14 and #15 are in planning stage estimated capacity will increase up to 27 billion pieces per annum by 2020
b. Supermax also has a contact lens division which was started in 2014, investment-to-date is around RM 100 million, currently already obtained license to market contact lenses in 60 countries
3. IS THIS COUNTER A STRONG GROWTH STOCK?
a. REVENUE RANGE (million): ~1538 million in 2019 annual report, this is a high revenue company.
b. SHARE PRICE: from 2015-2019, share price dropped significantly in 2019 due to stock splitting. Most of the time share price steady at around RM1.40
c. EARNING PER SHARE (EPS): earning per share in last 5 years increased by around 33% from 7.05 to 9.39 sen, indicating a good growth potential of this counter
d. FUTURE POTENTIAL/PROSPECTS: quite dependable and reliable counter, share price expected to be stable.
e. CAPITAL EXPENDITURE (CAPEX): spending on purchase of new fixed assets is RM 112 million, around 6% of total assets, due to factories expansion.
4. IS THIS A STRONG DIVIDEND STOCK?
a. DIVIDEND YIELD: in 2019 report, Supermax declared a total dividend payout of 2.5 sen per share, amounts to dividend yield of 1.75 % based on current share price.
b. CONSISTENCY: consistent dividend payout, last five years (2014-2019) dividends declared range from 2 to 6 sen per share.
c. DIVIDEND PAYOUT RATIO: in 2019 financial year, Supermax paid out about 26.7% of its earnings to investors in the form of dividend.
5. IS THE MANAGEMENT PERFORMANCE GOOD?
a. RETURN ON EQUITY (ROE): in 2019 financial year, Kossan Rubber achieved a good return of shareholders’ equity, at 11.4%.
b. COST-TO-INCOME RATIO: cost-to-income ratio is quite high at about 792%, but lower than Top Glove, which reported a cost-to-income ratio of about 1000%
6. OTHER INDICATORS:
a. CASH FLOW: cash flow is positive, around RM 173.7 million, equivalent to RM 0.13 per share
b. SUPPORT BY INSTITUTIONAL INVESTORS: this counter is well supported by institutional investors, there are 24 institutional investors at top 30 major shareholders list, including few insurance companies and investment funds.
Disclaimer: The content of the blog posts are for sharing purpose only. Readers are encouraged to carry out further research and analysis as well as follow up latest update information before making any investment decisions.
http://louisesinvesting.blogspot.com/2019/11/comments-on-supermax-corporation-berhad.html
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ColinLim
Good article
2019-11-23 13:17