MQ Research: US Detention Order Not Major Threat to Top Glove
Date: 17/07/2020

Source : MACQUARIE GROUP
Stock : TOPGLOV Price Target : 30.40 | Price Call : BUY


Yesterday, trading in Top Glove shares and warrants was halted from 2:30pm to 3:30pm, followed by a market-wide trading disruption from 3:30pm up to market close (do follow us on Telegram to stay updated).

Macquarie Equities Research (MQ Research) believes that the issue will be resolved quickly. It maintains an Outperform rating on Top Glove with a target price of RM30.40 and is of the view that any pullback in share price performance will be a good opportunity to accumulate.

Top Gloves will turn green soon. Stay cool folks and don't succumb to naysayers.

Cool heads will prevail today. No worries. Anything below RM20 is a good buy.
Of course Vultures begging you to sell.

Sapu below RM20

Don't Panic Sell, be wise just HOLD on to your Top Glove shares.

Consensus Rating For Top Glove by Investment Banks -

==========================================================
Credit Suisse ....................Outperform .............................37.00............. 15/7/2020
Kananga Invst....................Outperform .............................32.00............ 13/7/2020
Macquaries .......................Outperform .............................30.40............ 14/7/2020
TA Securities........................ Buy ......................................31.66 .............14/7/2020
Hong Leong ..........................Buy ......................................31.31............. 15/7/2020
Bimb Securities.................... Buy....................................... 31.30............ 14/7/2020
Nomura................................. Buy.......................................30.65............ 14/7/2020

Posted by usedor1 > Jul 17, 2020 12:33 AM | Report Abuse

All my dearest Supermax lover,

Everyone is in the middle of uncertainty to cut loss or win back the rally! Honestly, trading itself is a risk and we always know that the day we start to invest in Glove, we might not know how high it can go. Definitely, sky is the limit yet we always need to have a target to it!

Let's back to the discussion, i really wanted to hold till QR result to be out and if before hand the price is dropped then by all means i take all the losses or take enough profit from the 1st day i invested. Literally, i never thought i could cover all my losses during my IPO, delisted company, and etc. However, i do wish to earn more than what i able to get during this period. I know the only peak period that this stock would go is after knowing the QR result; otherwise it is very tough to judge it!

It's very hard for me to say that i wanted to keep this share yet i have another feeling it could rebound back. Let's take a step back and think why all these are happening.

First of all, it happens after the top BiG GUY of Glove got banned in US and doesn't that means we are going to profit from this? Isn't we are the OBM player able to supply more to US now after putting a halt at least 2 weeks for the glove? Are you really depending on TOp Glove machines to supply Glove? Aren't we doing our own business by ourself without having a share from othre company? Please do think on this and make your move wisely. Of course, after knowing all these you may wanna hold but we should be pessimistic in every doing.

On the other hand, we may wanna look who are the big guy here waiting to eat all the small fishes, do you think they would sell all and eat back all the small fishes at the bottom. If you wanna cut loss now, remember never ever come and invest again because the next entry you may feel awkward or do not know when to enter.

Let's be on the Supermax force side and just imagine if all of us stay together and don't sell it tomorrow; trust me the price will not drop. What is the motive, when no demand to sell more supply given to the buy and it will keep shine. Never ever try to sell below RM14.54. If each and every of you able to do this and not selling below of this price. Trust me the price will never drop. I can bet almost all the small fishes retailers are here to watch and read even though they are not replying here.

Whoever is with me and may the force be with us. Whoever agree to my verdict by all means let's put our hand together and we shall move up the day after then we may become brothers soon or later. Is there anyone wanted to join this force? I know we already have teams here yet let have a greater force than before regardless whoever in any team. I am hoping by next morning let's have a list at least by 20 people to ensure we strive for one last round for out profit! Let's win this journey and make our action roar fiercely.

I'm here for the FORCE OF SUPERMAX

a) Rishi
b) usedo
c) Goldberg

CREDIT SUISE raised TOPGLOV target price to RM37.00

Top Glove says can continue to ship to the USA despite detention order issues -Don't Panic ya.
========================================================
Top Gloves executive chairman Tan Sri Lim Wee Chai said the company will continue to ship but will park at the free trade zone.

The detention order issued by the US Customs and Border Protection (CBP) on its goods will definitely affect supplies to the US, glove manufacturing giant Top Glove Corp Bhd said.

It however assured that the effect is not serious as it can still ship to the US via Aspion Gloves .

“If they (CBP) are willing to settle (the recruitment fees issue) then they can release the shipment.

Top Glove says can continue to ship to the USA despite detention order issues
========================================================
Top Gloves executive chairman Tan Sri Lim Wee Chai said the company will continue to ship but will park at the free trade zone.

The detention order issued by the US Customs and Border Protection (CBP) on its goods will definitely affect supplies to the US, glove manufacturing giant Top Glove Corp Bhd said.

It however assured that the effect is not serious as it can still ship to the US via Aspion Gloves .

“If they (CBP) are willing to settle (the recruitment fees issue) then they can release the shipment.

Best comment of the day. Bursa did us a big favour in averting a bloodbath.
A blessing in disguise. Be calm tomorrow folks.
==========================================
Posted by therookieechingchong > Jul 16, 2020 4:39 PM | Report Abuse

Bursa is actually saving all of you for being emotional selling at today. Let you have cooling period to think rationally on holding stocks and buying :) just my 2 cents thought lol

Its current news not 2 months old.
==========================
Top Glove products placed on US custom's detention list
theedgemarkets.com
/
theedgemarkets.com

July 16, 2020 13:17 pm +08

Absolutely correct , Cyclops
===================================
Posted by cyclops80 > Jul 16, 2020 10:36 AM | Report Abuse

Just because someone go and announce news of 2 companies in charge of bottling and packing vaccine the share price go up so dem high. this is making vaccine. not make kicap or tomato sauce.

I feel this is the most likely Q4 results for Supermax - RM 363 mil to RM 396 mil.

22.00 with expected profit 71 x 5.11 = 363 mil (QTR 4) 5.11x

24.00 with expected profit 71 x 5.11 = 396 mil (QTR 4) 5.58x

Here is a RECAP on the figures given by our widely followed & respected Sifu freetospeak - Here you go-

TP depends on qtr 4 result. Heres some reference.

1.80 with profit 30 million (QTR 2)
rise to
4.30 with profit 71 million (QTR 3) 2.38x
rise to
16.00 with expected profit 71 x 3.72 = 264 mil (QTR 4) 3.72x

18.00 with expected profit 71 x 4.18 = 297 mil (QTR 4) 4.18x

20.00 with expected profit 71 x 4.65 = 330 mil (QTR 4) 4.65x

22.00 with expected profit 71 x 5.11 = 363 mil (QTR 4) 5.11x

24.00 with expected profit 71 x 5.11 = 396 mil (QTR 4) 5.58x

26.00 with expected profit 71 x 6.04 = 429 mil (QTR 4) 6.04x

28.00 with expected profit 71 x 6.51 = 462 mil (QTR 4) 6.51x

30.00 with expected profit 71 x 6.97 = 495 mil (QTR 4) 6.97x

A Study to Evaluate Efficacy, Safety, and Immunogenicity of mRNA-1273 Vaccine in Adults Aged 18 Years and Older to Prevent COVID-19

Timeline for 3rd Phase Clinical Trials - Moderna

Study Type : Interventional (Clinical Trial)
Estimated Enrollment : 30000 participants
Allocation: Randomized
Intervention Model: Parallel Assignment
Masking: Quadruple (Participant, Care Provider, Investigator, Outcomes Assessor)

Primary Purpose. : Prevention
Official Title: A Phase 3, Randomized, Stratified, Observer-Blind, Placebo-Controlled


Study to Evaluate the Efficacy, Safety, and Immunogenicity of mRNA-1273 S SARS-CoV-2 Vaccine in Adults Aged 18 Years and Older

Estimated Study Start Date : July 27, 2020
Estimated Primary Completion Date : October 27, 2022
Estimated Study Completion Date : October 27, 2022

Vaccine discovery-dubbed the White House Vaccine-- interesting, just take a read & lol.

This is July 15 2020. The US didn’t really start vaccine development until late March (at the earliest). You cannot get a vaccine developed, made and tested in 4 months. Think about this, you need to make a vaccine against an unknown virus that nobody has seen before, conduct at least 2 human trials (normally 3) that involves hundreds to thousands of people (Which you must find and gather together), with one trial normally requiring 1 year to conduct, in just under 4 months. This is not happening unless, you skipped the human trials and are going to inject the first compound that gave a ferret some short term resistance to SARS-Cov2 and called it a day. He// it took time to find out which animal could be infected by SARS-Cov2 virus to do animal test on… It is monkeys, cats and ferrets by the way.

This white house vaccine is an impossibility . I will say it right now. There is no vaccine. Much less a vaccine that is ready to be manufactured. So why this article?

I suspect this ‘news’ was officially leaked by Trump administration to fill the news media with the rumour of a US vaccine that is just around the corner. Trump will just say it up to the doctors, but he is very glad about it. Nice photo op. The purpose here is to shift attention away from how bad the Covid19 pandemic in the US has become. We have US counties that are 2 weeks away from running out of PPE (gloves, mask, face shields), and ICU units in several major cities have reach capacity (not difficult given some regions in the US have 1 ICU bed for every 10,000 people). In some hospitals, 40% of their patients are Covid19 cases. The virus is now threatening to cause states to reclose. And in the state of Mississippi , many of their politicians have contracted Covid19... A case of Republicans beliving their own BS.

This rumour of a Covid19 vaccine would distract the news cycle for a few days, maybe even a week as reporters try to find out more about this secret vaccine. Perhaps even sparking debates on who should get it first. And if they can get Joe Biden to enter this trap and voice his opinion, it will distract the media and people some more. Time for Trump to sneak away and reformulate a new campaign strategy to win the US November 3 elections.

Vaccine found by Moderna ? Here we go again. The results were noted to be promising.
Expect more of such news in future.
It will probably take at least 9 months to roll our a safe vaccine. FDA approval is required and this will take time.

Comfort Glove is playing catch up - Koon Yew Yin
Author: Koon Yew Yin | Publish date: Tue, 14 Jul 2020, 2:17 PM

The following is part of RHB OSK buy recommendation for Comfort Glove with a new target price of Rm 4.80.

RHB OSK Upgrade to BUY from Neutral with new MYR4.80 TP from MYR3.18, and 41% expected total return. The glove shortage has worsened as COVID- 19 cases in the US surged 24% MTD. We raise our earnings estimates and TP on higher ASPs. Our TP is based on CY21F P/E of 25x, which is at a 30% discount against peer average. This reflects its smaller market cap/liquidity to peers. BUY for its FY21 (Jan) 128% earnings growth, supported by 10% ASP increase and 14% capacity expansion.

Capacity expansion. We expect Comfort Gloves to add six production lines in FY21. Upon completion, its production capacity will increase by 14% to 5.9bn pieces pa (ppa).

My calculation

After I studied the buy recommendation by RHB OSK, I calculated the market cap of Comfort to produce 1 glove in comparison with Supermax.

Current Comfort share price is Rm 3.87 and annual production 5.9 billion gloves.

Current Supermax share price is Rm 17.60 and annual production 25.7 billion gloves.

Comfort market cap 580 million total issued shares X Rm 3.87 = Rm 2.24 billion.

Supermax market cap 1360 million total issued shares X Rm 17.60 = Rm 23.94 billion.

Comfort market cap Rm 2.24 billion divided by 5.9 billion gloves = 38 sen per glove.

Supermax market cap Rm 23.94 billion divided by 25.7 billion gloves = 93 sen per glove.

Based on my above calculation, I agree with RHB OSK Comfort target price of Rm 4.80.

COMFORT an established and grossly undervalued glove manufacturer compared to the BIG 4
and deserves a valuation of at least- RM6.80.

RHB TP RM4.80

Comfort Gloves (CG MK) Rising ASPs Lift All Boats; BUY

 UpgradetoBUYfromNeutralwithnewMYR4.80TPfromMYR3.18,and 41% expected total return. The glove shortage has worsened as COVID- 19 cases in the US surged 24% MTD. We raise our earnings estimates and TP on higher ASPs. Our TP is based on CY21F P/E of 25x, which is at a 30% discount against peer average. This reflects its smaller market cap/liquidity to peers. BUY for its FY21 (Jan) 128% earnings growth, supported by 10% ASP increase and 14% capacity expansion.
 Glove demand estimates raised as COVID-19 cases in the US surged 24% MTD. From 8-12 Jul, the number of new cases rose to above 60,000 per day. As of 12 Jul, total new cases increased by 367,000 or 24% on a MTD basis to 3.27m. As COVID-19 cases remain high in the US, demand for gloves should stay exceptionally strong, given its importance in protecting healthcare workers. As the US is the world’s biggest glove consumer, its stubbornly high number of cases means that demand for gloves should continue to rise.
 Thegloveshortagehasworsened.Withintwoweeks,thenumberofnew COVID-19 cases in the US increased beyond expectations. As a result, we estimate that glove demand has increased in the US, causing further depletion in global stock levels. Our estimates show that global stock levels could have declined by an additional 2% to 10.8bn pieces. This is enough for 15 days of demand (previously 15.2 days) and much lower than the pre- pandemic 60-day average.
 ASPassumptionsraised.Ourchannelchecksalsorevealedtheshortage of certain raw materials used to manufacture gloves, capping near-term supply. We increase FY21F-23F ASP assumptions by 2-7%. We estimate that the impact of the higher ASP should exceed the additional logistics costs expected from the US Food & Drug Administration’s latest import alert.
 Capacity expansion. We expect Comfort Gloves to add six production lines in FY21. Upon completion, its production capacity will increase by 14% to 5.9bn pieces pa (ppa).
Consumer Non-cyclical | Rubber Products Buy (from Neutral)
improvement as ASP is on an increasing trend. Post COVID-19, the company’s earnings growth outlook remains positive, as we expect glove demand to continue its annual 8-10% growth due to higher hygiene awareness globally.

BREAKING NEWS
=====================================
RHB TARGET PRICE REVISED TO RM 18-88

SUPERMAX CORP BHD-AKA SUPERMAN

Steeper ASP Increases At Distribution Level; BUY

1-Keep BUY with higher DCF-derived MYR18.88TP from MYR13.88,18% upside and c.1% yield. Gloves shortages have worsened, as COVID-19 cases in the US have surged 24% MTD. We increase our earnings estimates and TP due to higher ASPs. As Supermax Corp has its own distribution channel in the US, we expect its earnings to outperform peers. Our new TP reflects 27.5x FY21F (Jun) P/E – a 23% discount against the sector average due to SUCB’s smaller market cap/ liquidity.

2- Gloves demand estimates have increased, as COVID-19 cases in the US surged 24% MTD. Over the past five days (8-12 Jul), the number of new cases daily has surged >60,000. As of 12 Jul, the total number of cases has surged by 367,000, or 24% on a MTD basis to 3.27m. As COVID-19 cases remain high in the US, gloves demand should stay exceptionally high due to the important need to protect healthcare workers.

3-Gloves shortages have worsened. Within a period of two weeks, the number of new COVID-19 cases in the US has increased more than expected. As a result, we estimate gloves demand there has increased and caused further depletion in global stock levels..

4-ASP assumptions increased. Our channel checks also reveal the shortage of certain raw materials used in gloves manufacturing. This has capped near-term supply. We have increased FY21-22 ASP assumptions by 2-9%. This increase is higher than SUCB’s peers due to its distribution channels in eight countries, including the US and Brazil. These countries are still registering high new COVID-19 cases.

We expect gloves demand to continue the usual uptrend growth of 8-10% due to higher hygiene awareness globally.

Share Dividend will be declared after announcing fantastic Q4results. Ratio - 50 : 1000.

May even declare a bonus issue of 1 share for every 2 held.

Be patient and you will be rewarded.

FYI , limit up today is RM 17.70.

Uncle's New TP for Superman- Rm 24.20

I want to be very safe and conservative in calculating my Target price. I assume the company does not have additional production and it does not increase its selling price for the next financial year ending June 2021, its annual profit will be 4 X 4th quarter PAT Rm 410 million = Rm 1,640 million.

EPS Rm 1,640 million divided by 1,360 total issued shares =Rm 1.21.

Based on P/E 25 my target price will be Rm 30.25.

Based on P/E 20 my target price will be Rm 24.20 which is easily achievable.

Warning by Top Glove Boss of a severe impending world shortage of Gloves.

“Before Covid-19, we were running (at) about 80% to 85% capacity. Now we are running MORE than 100%. Though we add in new capacity, we are still not able to cope with the demand; the demand is just too strong,” he said.

SUPERMAX- KEY INVESTMENT HIGHLIGHTS (Latest (July) Analyst Briefing Report)

1-Business model differentiation with successful Original Brand Manufacturer (“OBM”) model
Original Brand Manufacturing (OBM) accounts for 70% (pre-Covid-19) and 95% (Covid-19 outbreak) of the glove volumes with worldwide trusted homegrown glove brands such as Supermax, Aurelia, Maxter, Medic-dent and Supergloves.

2 -Focusing on OBM model allows Supermax to gain customer loyalty and also derives a 2nd stream of income (distribution income)

3-Broad global footprint with geographical expansion in the pipeline .Supermax’s export footprint spans across over 165 countries globally.

4-The Group collaborates with over 1,200 distributors globally, in addition to eight of the company’s own distribution centres based in the United States, Brazil, Canada, Ireland, United Kingdom, Hong Kong, Singapore and Japan.

5-Solid capacity growth, proving potential uplift to margins.

6-Newer plants are highly efficient and can achieve EBITDA margins of over 20%

7-Target to achieve a total of 44.7 billion pieces by calendar year 2022.

8- Vacant landbank, totalling 130.4 acres, located in Bukit Kapar and Serendah for the next phase of expansion

HALF-TIME BREAK- JUST TAKE A READ WHAT UNCLE HAS TO SAY ABOUT SUPERMAX TODAY
HIS TP -RM18-00
++++++++++++++++++++++++++++++++++++++++++++++++++++

Supermax: Investors must be more observant - TP-rm18.

Koon Yew Yin 10 July 2020

From my experience as a listed company director, I know our company used to employ hundreds of people. In the finance department alone, we had about 50 staff to produce the quarterly and annual accounts. When so many people were involved in the preparation of the accounts, it was impossible to keep any secret, especially quarterly and annual accounts.

Supermax share price started to shot up 9 trading days ago. It shot up from Rm 7.72 to close Rm 12.44, an increase of Rm 4.72 or 61% in 9 trading days as you can see from the price chart below.

The price shot up Rm 1.58 yesterday which indicated that the result of last quarter ending June is already known to a few rich investors.

Before 9 am yesterday, I WhatsApp to about 50 friends on my contact list to tell them not to be afraid to use margin finance to buy more Supermax shares.

To make more money, investors must be more observant and have a lot of common sense. Investors must have entrepreneur spirit and willing to take calculated risk.

Most investors will not buy Supermax today because it has shot up too fast and they want to wait for the price correction or price weakness to buy. Based on the aggressive buying in the last 9 trading days, it looks like the price will continue to go up higher. Conservative investors will have to wait a long time to be able to buy. By which time, the price will have gone up a few more Ringgit.

In any case, I advise investors not to sell their shares as the Covid 19 pandemic will not be under control for at least another year as many scientists predicted.

World sees record 212,326 Covid-19 cases in 24 hours

THE World Health Organisation reported a record 212,326 new Covid-19 coronavirus cases in the last 24 hours. The WHO has reported more than 163,000 new cases every day for the past week, led by a rise in the Americas.

There are more than 12 million Covid 19 cases in the world and the number of new cases is still spiking. As a result, the demand for medical gloves far exceeds supply. All the glove makers are increasing their selling prices to make unprecedented profit which is being reflected on their share prices.

That is why all the glove makers’ shares are shooting up like rockets. Investors should not sell their holdings because I strongly believe my target price of Rm 18 is achievable when Supermax announces its next 2 quarter results. This is my honest opinion. I am not asking you to buy to push up the share price to enrich me. Readers must remember whether you buy or sell does not make any difference to the share price because the daily traded volume is tens of million shares.

Posted by mf > Jul 9, 2020 3:44 PM | Report Abuse

Scientists warn of potential wave of brain damage linked to Covid-19
==================================================

We have a few cases here in this forum without any link whatsoever to Covid. LOL

Looks like Superman fantastic results ( 380mil - my estimate ) flowed/ leaked to the market, on course towards 15 before announcement.

Surpermaxx 68mil Treasury shares is worth a whopping is worth 800 million (11.78).now.

LATEST NEWS -SHORTAGE OF PPEs IN AMERICA
By
William Wan of Washington Post

July 9, 2020 at 8:00 a.m.

Health-care workers on the front lines of the coronavirus pandemic are encountering shortages of masks, gowns, face shields and GLOVES — a frustrating recurrence of a struggle that haunted the first months of the crisis.

Posted by Maxam > Jul 8, 2020 8:22 PM | Report Abuse

RHBIB Share Margin Valuation (Latest Revision)*
_The ceiling price for rubber gloves counters effective 08/07/2020_

COMFORT @ RM2.80
HARTA @ RM11.20
KOSSAN @ RM7.20
RUBEREX @ RM2.40
SUPERMX @ RM7.00
TOPGLOV @ RM15.00

???????
Can anyone using RHB confirm?
================================================

Maxam, this is confirmed by RHB investment bank. TQ

Shines Bright Like A Diamond

Against the backdrop of unmet burgeoning glove demand, Supermax is well
positioned to be the best beneficiary of record high ASP hikes. Its OBM and
distribution network are the envy of the industry. To top it all, this coincides with its
timely yet aggressive multi-year expansion, outstripping its peers. With all these
positives and consistent execution, Supermax should narrow its deep discount to
comparable peers. Initiate coverage with BUY and target price of RM12.40.

1-Significantly superior earnings growth outlook. Supermax Corporation’s (Supermax)
OBM and independent distribution network allow it to better maximise record high glove
ASPs relative to peers. Furthermore, its timely yet aggressive capacity expansion of a 2-
year CAGR (2019-21) of 22.5% outstrips our observable industry growth of 15.7%. With
these, Supermax’s earnings are supercharged, offering an incredible 2-year earnings
CAGR (FY19-21) of 183.6%, almost double peers’ average of 90%.

2- Healthy and consistent demand growth for gloves. Sales volume of medical grade
gloves have been growing progressively over the past two decades at a 19-year CAGR
(2000-19) of 8.4%, contracting only once by 1.3% yoy in 2011. This was post the H1N1
pandemic that saw an inventory build-up in the preceding year. The Malaysian Rubber
Glove Manufacturers Association expects global glove consumption to grow 8-10%,
driven by developing populous nations where per capita usage is much lower than in
developed countries.

3-Vaccine discovery for COVID-19. The discovery of a vaccine and/or treatment could
cause negative newsflow. However, scaling up global manufacturing to achieve herd
immunity may take 12-18 months from the point of vaccine discovery. Boston Consulting
Group estimates it would require up to 5b vaccine doses to cover more than 60% of the
world’s population. As such, earnings are unlikely to sharply contract immediately as
demand still far outstrips new supply. But we do envision that ad hoc ASPs could be the
first to normalise off their high base.

4- Initiate coverage with BUY and target price of RM12.40, based on 15.0x FY21F PE.
Its sizeable local peers (Hartalega, Top Glove and Kossan) are trading at an average of
34.4x FY21F PE, but we opine that Supermax should be pegged to +0.5 SD of its 5-
year historical mean. While it is at a discount to peers, we are cognisant of the fact that
valuations are based on the peak earnings cycle. However, our blue sky scenario entails
Supermax potentially trading at 21.3x or +2SD of its 5-year mean upon a potential entry
to the FBMKLCI Index.

It implies a target price of RM17.60. Once earnings normalise, we believe Supermax should re-rate and narrow its valuation discount to sizeable local peers’ due to its:

a) downstream value creation,
b) aggressive expansion ambitions,
c)consistent execution, and d) potential inclusion in the FBMKLCI index.

UOB KAYHIAN -SUPERMAX CORP BHD. - TARGET PRICE - RM 17.60

Latest post: Mon, 6 Jul 2020, 9:47 PM

SHINE BRIGHT LIKE A DIAMOND

VALUATION

Initiate coverage with a BUY and target price of RM12.40, pegged to 15.0x FY21F PE. While its peers are trading at an average of 34.7x FY21F PE, Supermax should be pegged to +0.5SD of its 5-year historical mean. While this is still a discount to peers, valuations are based on the peak earnings cycle. However, our blue sky scenario entails Supermax potentially trading at 21.3x or +2SD of its 5-year mean on a potential entry to the FBMKLCI Index. It implies a target price of RM17.60.

WOW! JUST HOLD ON TIGHT TO YOUR SUPERMAX SHARES- MORE GLORY DAYS AHEAD.

=======================================
Posted by freetospeak > Jul 6, 2020 5:58 PM | Report Abuse

UOB rerate SUPERMAX to RM12.40 implies RM17.60.

However, our blue sky scenario entails Supermax potentially trading at 21.3x or +2SD of its 5-year mean on a potential entry to the FBMKLCI Index.

It implies a target price of RM17.60.

Inclusion in FBMKLCI?

Market cap stood at RM12.8b as of 3 Jul 20. Should it attain our target price of RM12.40, it would command a market capitalisation of RM16.9b. It could be included in the FBMKLCI Index as a constituent component if it reaches the 25th-largest market capitalisation, a potential threshold of RM16b-17b. This could further lead to a re-rating as seen for Hartalega and Top Glove.

HLIB Research dated 6th July 2020.

BIG FOUR GLOVE players are expected to increase their capacity to fulfill increasing demand. ASP are expected to continue rising to the moon lol.( just joking )
Demand for rubber gloves is only expected to grow exponentially as the Covid-19 pandemic shows no signs of abating.

Posted by Henry8833 > Jul 6, 2020 11:00 AM | Report Abuse

Supermax results should better than Hartalega this year even though it cannot beat Top Glove. This year is time Supermax reaps benefit of OBM after years of high expenses in its marketing network for OBM and maintaining oversea offices in Brazil, USA, UK, Japan etc.
================================================

Absolutely Henry8833, you reap what you sow.

Looks like its going to be a Golden Harvest.

Thanks to DS Stanley Thai's fantastic vision in setting up distribution and marketing centres overseas to promote their own brands ie the coveted Aurelia brand

On course to achieving RM15.

These are the Assets ( Assets being flogged by Advanced Medical Products Sdn Bhd in Liquidation meaning ceased business and selling off assets) that Anzo intends to acquire I believe. Wintrade may be a third party in this deal.
Anzo has to rejuvenate the production from scratch as these are bare assets that has been idle. This a surely going to be a
Herculean task for Anzo as glove manufacturing is not Anzo's forte/strength. Just my 2cents only.


Advanced Medical Products Sdn Bhd (In Liquidation)
c/o Ferrier Hodgson MH Sdn Bhd
Baker Tilly Tower
Level 10, Tower 1, Avenue 5
Bangsar South City


Lands and Building
An industrial premise comprising of a three-storey office building, a single-storey detached factory together with a three-storey warehouse, single-storey warehouse and ancillary building erected on Lot Numbers 8442, 8443, 8960, 8961 & 8964, Tempat 18th Mile Bruas Road, Mukim Sitiawan, Daerah Manjung, Perak Darul Ridzuan.


1-Lands

Locality: Mukim Sitiawan, District of Manjung, Perak Darul Ridzuan
Tenure: Freehold
Restriction-In-Interest: Nil
Category of Land Use: Industrial
Land Title Area:
Lot No. Title No. Land Area
Hectares 3.1970

2-Buildings

Buidling (A): A Three-Storey Office Building
Building (B): A Single-Storey Detached Factory (Production Area) together with a Three-Storey Warehouse (Chemical Storage Area)
Building (C): A Single-Storey Warehouse (WIP Area, Store & Packaging Area)
Ancillary Buildings: Guard House, Workshop, Quarantine Area & Store and Cafe

All the above Assets for a whopping Rm55 million.

An undervalued high yielding GEM- TP RM1.68

Malakoff’s IPO price was RM1.80 in 2015. The institutional tranche of 1.28 billion shares was
oversubscribed by 13 times. As at 21st February 2020. The top 10 largest shareholders own
80.47% of the total shares issued- namely large institutional funds such as EPF and KWAP.

With the current low interest rate market environment and an uncertain global economic situation, Malakoff achieves the criteria of high growth profit prospects, high dividend yields, stability and
sustainability. The immense amount of intrinsic value seen now in Malakoff is beyond comparison from the period of 2015-2019

Dividend Yield

Current Dividend Per Share: 6.55 cents
Current Dividend Yield: 6.46%
Estimated Dividend Per Share TP: 7 cents
Estimated Dividend Yield at RM1.68 TP: 4.17%

Catalysts

• June 2020, competitive bidding for one gigawatt (GW) of solar plants worth RM4 billion
under Large Scale Solar (LSS) scheme 4 is open. Malakoff would be a beneficiary of the
scheme if bidding is successful.

• Alam Flora provides recurring income and visibility till 2033. Alam Flora’s FY18 net profit
was RM99.45 million. This will contribute positively to Malakoff’s upcoming financial
quarters. There may be increased demand for Alam Flora’s disinfection and sanitisation
services to curb Covid- 19. Further concession opportunities in locations such as Kelantan,
Terengganu and Labuan can be explored as well.

• Growth in renewable energy segment. Opportunities between Malakoff and Alam Flora to
develop waste-to-energy (WTE) projects.

• Stability in earnings as impairments on KEV has been made.

TP-1.68

Maybank IB Share Margin Valuation (Latest Revision)
The ceiling price for rubber gloves counters effective 30th June 2020

Comfort @ RM3.42
Harta @ RM10.52
Kossan @ RM7.87
Ruberex @ RM2.21
Supermx @ RM7.41
Topglov @ RM18.00

**The valuation will be based on the ceiling price or last closing price, whichever lower.

Maybank IB Share Margin Valuation (Latest Revision)
The ceiling price for rubber gloves counters effective 30th June 2020

Comfort @ RM3.42
Harta @ RM10.52
Kossan @ RM7.87
Ruberex @ RM2.21
Supermx @ RM7.41
Topglov @ RM18.00

**The valuation will be based on the ceiling price or last closing price, whichever lower.

FY 2021, PAT should be at least RM 1.2 billion.

EPS = 1200/1360 = 0.88

PER = 15, the target price = 13.23
PER = 20, the target price = 17.60

You and your brilliant Uncle will be laughing all the way to the bank.

Unfortunately, there are some weak/frustrated holders without foresight are also selling and asking people to sell. Those smarter investors view this as a good buying opportunity to make money.

Those who did not sell at higher prices should not worry because due to Covid 19 pandemic the demand for gloves far exceeds supply. As a result, glove price continues to go up higher and higher. As you can see all glove makers have reported increased profit in the last quarter.

I am very sure all the glove makers will report increased profit in the next quarter. All investors should wait for a few weeks 9 ( probable late July) for Supermax to announce excellent set of Quarterly results estimated to be around Rm200m.

Be focussed and patient folks!

Source: Company data, Maybank Kim Eng

Meanwhile, Maybank Investment Bank Bhd’s research team (Maybank IB Research) pointed out that the market shares of the five major rubber gloves players in Malaysia have grown over the years and it estimated that their combined global market share is 60 per cent today.

“Given the nature of the manufacturing business, economies of scale play a big part in reducing the unit cost and the smaller players have exit the market over the years.

“With a more consolidated market and the tight supply outlook into 1H21, we believe the glove players also have better pricing power today,” it opined.

For players that has more flexibility in raising ASPs (such as Supermax), it pointed out that the confirmed ASPs for July 2020 is already more than 40 per cent higher than pre-Covid-19 level in February 2020.

As for players that have bigger exposure to the big distributors (such as Hartalega, Kossan), Maybank IB Research believed the current blended ASP could also be more than 10 per cent higher than pre-Covid-19 level.

“This is because the big distributors only account for 30 to 50 per cent of the sales volume, leaving the remaining 50 to 70 per cent of volume available for faster upward ASP adjustments. Comparatively, none of Top Glove’s customer accounts for more than four per cent of its sales,” it said.

As for Supermax (a unique manufacturer-OBM player), the ASP hike is much steeper than the abovementioned OEM players.

Supermax: My Target Price 

By Koon Yew YinPosted on June 22, 2020

Total issued shares is 1,300 million.

1st quarter revenue Rm 447 million, NP 71 million, EPS 5.42 sen.

Since the company has its own sale outlets in US and other countries, it can easily increase its selling price for gloves. Any price increase is pure profit.

It is quite safe to assume it can increase gradually 100% minus 30% tax = 70% by the end of the 4th quarter. That is 70% of Rm 447 million = Rm 313 million divided by 3 = Rm 104 million or 8 sen EPS in each quarter.

2nd quarter EPS 5.42 sen + 8 sen = 13.4 sen

3rd quarter EPS 13.4 sen + 8 sen = 21.4 sen

4th quarter EPS 21.4 sen + 8 sen = 29.4 sen

Total 70 sen

Assuming P/E 20 target price Rm 14

Assuming P/E 15 target price Rm 10.5

Useful information:

The World Health Organisation has just reported 150,000 new Covid 19 cases, the biggest number of Covid 19 cases in one single day. US has 2.356 million cases and 122,200 deaths and Brazil has 1.089 million cases and 50,600 deaths. Based on the continuous increase of cases in almost all the countries in the world, the pandemic is still spreading quietly rapidly. Many scientists predicted the pandemic will not be under control for at least another year.

It looks like the demand for gloves will continue to exceed supply. As a result, glove price will continue to increase and all the glove manufacturers are making more and more profit which should be reflected on their share prices.

You think GLOVE oversupply? You think VACCINE by year end?

Read these news from Bloomberg dated 19th June and I am reproducing it here.

Bloomberg news highlight a fact - "We Will Be Living With the Coronavirus Pandemic Well Into 2021"

Most experts believe a vaccine won’t be ready until next year. It’s time to reset our expectations and change our behavior.

We Will Be Living With the Coronavirus Pandemic Well Into 2021

The virus is winning. That much is certain more than six months into a shape-shifting pandemic that’s killed 450,000 people worldwide, is gaining ground globally and has disrupted lives from Wuhan to Sao Paulo.

While promising, fast-moving vaccine projects are underway in China, Europe and the U.S., only the most optimistic expect an effective shot to be ready for global distribution this year.

If, as most experts believe, an effective vaccine won’t be ready until well into 2021, we’ll all be co-existing with the coronavirus for the next year or longer without a magic bullet. And this next phase of the crisis may require us to reset our expectations and awareness and change our behavior, according to public-health professionals.

In their view, success isn’t defined as returning to life as it was in 2019. Rather, it’s about buying time and summoning the staying power and policy flexibility to limit the destructive capacity of an expanding pandemic, which may result in global deaths of more than one million according to one estimate, until there are medical tools to effectively treat and immunize against the virus.

“People are fatigued. They mistakenly feel that things were going away,” said Cameron Wolfe, an infectious-disease doctor and associate professor of medicine at

Duke University. “We’re going to have to figure out a way to live with this.”

Its recent bro, not old at all. Investors need to mull over it during the weekend.

My gut feel is RM200m for the coming Quarter which will be announced most probably in July.
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Posted by freetospeak > Jun 19, 2020 6:30 PM | Report Abuse

goldberg...so old post also kena dig out...thumbs up..lol...yahoo128...350 million u so greedy ah...lol

Posted by OTB > Jun 19, 2020 10:23 AM | Report Abuse

Dear freetospeak,

I choose 210 million is good enough for me.
Good job.
Thank you.

Posted earlier in the day- Here you go-

Posted by freetospeak > Jun 19, 2020 10:17 AM | Report Abuse

When TG spike up from 12 that day.it is the day the result is leaked and ppl know tg result is 3 x previous qtr profit...so 5.5x3 = 16.5 is the factored in price.

For supermax..the result is not known..so the price now has not price in the qtr 4 result. u will c in july the result is leaked n price shoot up b4 qtr 4.

IF result is
100 million TP = 6.75
140 million = 9.0
210 million = 13.5
280 million = 18.0
350 million = 22.5

The above price might is jus a guide n not neccesary be reached b4 qtr 4.

Posted by 20202023 > Jun 17, 2020 11:06 PM | Report Abuse

Well said 20202023 especially this " where the clear winner will be the Bull team post Q4 result (July earliest or Aug) as price will revert to the FA (based on improved fundamental)"
========================================================
Over last 2 weeks, I read comments from both bear team & bull team and my conclusion is both are right. Bear team is right for short-term direction of Supermax price (drop, correction, pullback etc) but eventually bull team will become a clear winner post Q4 result (July earliest or Aug) as price will revert to the FA (based on improved fundamental)