Luster Industries Berhad (5068)

Sector: Industrial Materials, Components & Equipment

Core businesses: Manufacturing,

                            Property development & construction,

                            Gaming & Leisure

                            Gloves & Healthcare

The article focuses on the potential reversal of Luster's share price based on the company's earning potential in the upcoming quarters.

Monthly Chart

Weekly Chart

Daily Chart

Steady increase in profit after tax

So, how the revenue stream breakdown looks like?

Luster Industries Berhad's segmental revenue in RM '000

The revenue breakdown reveals the management team's effort to source for alternate income stream. The manufacturing and healthcare (glove) section revenues are expected to keep growing.

As stated in the latest QR report (Q1 2021), the construction of the factory building as well as the high speed double former dipping production lines have started and, barring any unforeseen circumstances, is expected to be completed by Q3 of 2021. Luster has started to place order for the raw materials for the glove manufacturing and the marketing activities for the gloves have also been carried out.

How will it grow further?

On 12 April 2021, Luster inked an agreement to provide engineering, procurement, construction and commissioning (EPCC) for 12 rubber glove production lines in the US.

The business deal was between American Nitrile LLC with Glovconcept Sdn Bhd, a 60%-owned unit of Glovmaster Sdn Bhd, which is in turn 56%-owned by Luster. Glovconcept will undertake the designing, building and delivery of a glove manufacturing factory on a turnkey basis, with glove output of not less than 38,000 units per line per hour.

It was said that the estimated cost to be borne by American Nitrile in building the glove production plant is around US$3.6 million or RM14.9 million per line. In turn, Glovconcept is entitled to a percentage of sales proceed from the 12 production lines with a minimum of US$2 million per year.

On 9 June 2021, Luster received its RM 50 million deposit.

Luster's business expansion and diversification makes it a dynamic company which not only aims to survive but to thrive in the pandemic enviroment. With steady revenue streams, investors may expect Luster to have better quarter profits ahead.

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Disclaimer: The above analysis is intended solely for informational and educational purpose for peers and, should not be used as a basis for making any specific investment, business or commercial decision. Any decisions to place trades in the financial markets, including trading in stock or options or other financial instruments, is a personal decision that should only be made after thorough research, including a personal risk and financial assessment, and the engagement of professional assistance to the extend one believe its necessary.