Hi guys,

Right now the demand for Gloves have outstripped supply worldwide due to the Coronavirus. Malaysia being world Latex & Nitrile Rubber Glove World Champions stand to reap a WINDFALL

It is said that Malaysia commands 65% of the 300 Billion Glove Market.

Why Malaysia and not Japan & USA?

The answer is obvious

Only Malaysia has rubber trees. And Rubber Gloves need fresh latex.  Japan & USA no rubber trees! So is Oil. Malaysia is a net producer of crude oil which is converted to synthetic nitrile rubber

Ok so now we know that while airlines, shopping malls, hotels, tours and even factories are in a lock-up shutdown Gloves' producing factories are all RUNNING AT FULL SPEED

See TopGlove goes into overdrive production stepped up in both day & night 24 hour shift

Top Glove stretches to meet demand as virus grips the world

Malaysian group's 44 plants run full tilt to churn out medical

supplies

Top Glove's 44 factories and 18,000 employees are working around the clock to try to meet a massive upsurge in demand amid the spiraling health crisis, in which gloves are a vital barrier against coronavirus transmission.

And from theedgedaily

Surge in demand makes glove sector attractive to investors

Supriya Surendran

Thus, the services of Malaysian glovemakers, which supply almost two out of every three gloves globally, are urgently needed.

While the economy and companies are suffering because of the government-­ordered lockdown, the pandemic has proved to be a catalyst for Bursa Malaysia-listed glovemakers. The flurry of buying activity has pushed their share prices up by 10% to 68% year to date.

Since Gloves need materials like Latex resin & Nitrile resin LUXCHEM also stepped up production. A call to LUXCHEM Office showed that they are open for business as Material for Glove Manufactures are essential industries. More so as Top Glove goes into non-stop 24 hour production as well as Hartalega (already increased Glove prices by up to 5%) Comfort Gloves, Supermax, Rubberex & others

Now there this new found demand is accompanied by a collapse of both Crude Oil & Rubber prices - making a saving of 50% to 60% on feed cost

Let's go deeper and see how this lower cost will power up the PROFITS OF LUXCHEM EVEN MORE THAN GLOVES

Refer Qtr of Luxchem

Revenue 187,155,351 

Cost of sales (165,745,041

See how high was the cost of sales for LUXCHEM?

COST OF SALES WAS 88%!!

Why so high?

Crude OIl was as high as USD70 & RUBBER PEAKED AT $240 A KG ON JULY 2019

NOW CRUDE HAS FALLEN TO USD18.44 (Real live time http://www.livecharts.co.uk/MarketCharts/crude.php

RUBBER CRASHED TO THE LOW OF $130 See https://tradingeconomics.com/commodity/rubber

These twin collapse in prices Rubber (Latex resin) Crude OIl (Nitrile resin) WILL TRANSLATE TO HUGE PROFITS FOR LUXCHEM BALANCE SHEET GOING INTO 2020 & BEYOND 

In fact LUXCHEM also did very well when in Year 2014 Shale OIl Emerged from USA to hammer Crude Oil

On that Year of 2014 when JTiasa (RM2.50) & Mudajaya (Rm2.60) Calvin warned Uncle KYY to sell as Low Crude OIl will hammer Biodisel & Coal fired power plant of Mudajaya in India. Uncle KYY sold like no tomorrow & Both Jtiasa & Mudajaya crashed 60% to Rm1.00 & Rm1.10.  After 7 months later Uncle KYY re-emerged in i3 forum but forgot to thank Calvin.

BUT LUXCHEM'S FORTUNE THEN WENT THE OPPOSITE AS ITS SHARE PRICE POWERED UP & DOUBLED IN PRICES FROM 64 SEN (2014) TO A HIGH OF RM1,31 (YEAR 2015)

The March 2015 Edition of STOCK PERFORMANCE GUIDE By DYNAQUEST has a comment by Great Sifu Dr Neoh Soon Kean then

See page 206

Last paragraph 6th line from bottom

And i quote

"Looking forward, we think the fall in oil prices could bode well for LUXCHEM as they used petroleum based products as raw materials." (Dr. Neoh Soon Kean, Dynaquest)

So that's it!

The Cycical downturn of oil has returned TO BOOST UP THE PROFITS OF LUXCHEM ONCE MORE

Calvin Tan Reseach calls for a strong buy on LUXCHEM with a near target price of 80 sen. If it can breach then next target will be Rm1.00 to Rm1.20

Best Regards

Calvin Tan Research

Republic of Singapore

Please buy or sell after doing your own due diligence. In doubt consult your stock broker or fund manager