KUALA LUMPUR: The proposed disposal of Leong Hup Holdings Bhd to Emerging Glory Sdn Bhd for a total consideration of RM318.65 million. (This is the value to privatize it in 2012.)

Scenario A: RM318.65 million represents 100% of LHI value (market cap)
Compare to current outstanding shares. 3.650bill
RM318.65 million / 3.650bill = Rm0.0873

Scenario B: RM318.65 million represents 53.26% Emerging Glory DOES NOT OWN.
Making the TOTAL value of Rm598.29million
Compare to current outstanding shares. 3.650bill
Rm598.29million / 3.650bill = Rm0.164.

So now it depends whether Affinity was partner in the privatization in 2012 or Emerging sold some to Affinity AFTER privatization. Either way, the prices are lower than what Affinity is selling now.

https://theedgemalaysia.com/article/offer-price-leong-hup-seen-unfair-reasonable

It's possible. Affinity/Clarinden being a private equity institution could be holding the shares before IPO. LHI was privatized in 2012 and delisted. Affinity could be a partners then. So their cost could be lower.

Leong Hup is backed by prominent Asian private equity firm Affinity Equity Partners, which currently own stakes in Burger King Korea and China's Beijing Leader & Harvest Electric Technologies Co Ltd.

https://www.nst.com.my/business/2019/04/482904/leong-hups-ipo-secures-global-trader-louis-dreyfus-cornerstone-investor

Just bcoz they are cornerstone investor does not mean they have insider information. They are selling at a loss. I think it's they own internal issues of balancing their portfolio. They could had margin called in other investment so required cash to plug the hole. Chances are to do with China investments. For example CapitalLand, has to revalue their assets due to their exposure to their property investment in China.

LHI is still fundamentally good. It's a hold for me.

Bursa see red but LHI hold at 52 cents. This is the new support.

Market got spooked by China economic data and US Manufacturing PMI suggesting recession. This already suspected by many even data was released. I still wait for Q4 results. If profit is maintained then it is good. Healthcare is the sector to be in recession.

I'm hoping for that ... I'll start adding more if hit 50cent. Good fundamental ... ALWAYS buy/sell on fundamental. Unless have external factor which I don't anticipate in the short term.

gankm

BBQ already. No point talking on fundamental. Everyday drop a bit and a bit. Will break below 0.50 cents very soon.

Me too. Q4 shld be good ... then Q124 ... after that decide. I believe there's more room to go up.

ryoyagod

I see. Haha.
TP alrdy, dompeilee? So rush 😅 I wait for its Q4 out 1st and see

That's a smart move. Take advantage of yesterday's upward momentum. This is the kinda thing I like. Knowledge sharing. Not like some other people. ... cry father, cry mother for no reason.

dompeilee

Finally SOLD some Kossan @ $2.10 to lock in my 856th consecutive market open day of share trading gains!😘🍻💰

And keep on the look out for demand normalizing. Then TopGlove and Harta would be the top pick amongst the glove companies bcoz of their easily increase production capacity. Question is HOW long to wait for normalization.

Oh Thank you xiaoeh ...
Still the same as I presented but with current covid case rise, it might give it a bit bump up.
But I try not to rely on covid too much on glove recovery. I prefer to be conservative and see normalization.

Vaccine does not work

https://www.nationthailand.com/thailand/general/40034695

You see their disposed number and date are the same? They are the same group. They sell one time, 3 names are registered at the same time.


AFFINITY ASIA PACIFIC FUND IV (NO.2) L.P. (a substantial shareholder) disposed 4,272,000 shares on 10-Jan-2024.
CONCORDANT INVESTMENTS PTE LTD (a substantial shareholder) disposed 4,272,000 shares on 10-Jan-2024.
CLARINDEN INVESTMENTS PTE LTD (a substantial shareholder) disposed 4,272,000 shares on 10-Jan-2024.

AFFINITY ASIA PACIFIC FUND IV (NO.2) L.P. (a substantial shareholder) disposed 5,300,000 shares on 09-Jan-2024.
CONCORDANT INVESTMENTS PTE LTD (a substantial shareholder) disposed 5,300,000 shares on 09-Jan-2024.
CLARINDEN INVESTMENTS PTE LTD (a substantial shareholder) disposed 5,300,000 shares on 09-Jan-2024.

AFFINITY ASIA PACIFIC FUND IV (NO.2) L.P. (a substantial shareholder) disposed 3,213,100 shares on 08-Jan-2024.
CONCORDANT INVESTMENTS PTE LTD (a substantial shareholder) disposed 3,213,100 shares on 08-Jan-2024.
CLARINDEN INVESTMENTS PTE LTD (a substantial shareholder) disposed 3,213,100 shares on 08-Jan-2024.

Affinity, Concordant and Clarinden are of same group. So far they had disposed 23% of their holdings.
But they still hold 240million shares.

So will it drop tomorrow?

Many investors are looking at Msian glove this way:
Pre-covid: Harta Rm5.20. Kossan: Rm2.10
Now: Harta: Rm2.98. Kossan: Rm1.97

So Harta has more room to catch to Pre-covid price while Kossan already almost there.
But that is a wrong idea. Again, pre-covid is about expansion on production capacity. NOW it is about COST EFFICIENCY in production. Moreso, Harta had cut production capacity by significant amount compare to pre-covid.

So we look at quarterly report ending Sept 2023. (Standalone quarter. Not cumulative)
Harta: Revenue: 452,085. Operating Expenses: (436,163). Cost/Rev : 96.48%
Kossan: Revenue: 403,479. Operating Expenses: (373,822). Cost/Rev : 92.65%

So Kossan already caught up and exceeded Harta on COST EFFICIENCY.
So in this context, Kossan actually got more room to grow. Hopefully, we can see this on Q423 report.

Meanwhile, RHB Research said the product quality from Chinese glove makers were on a subpar level, also evident from the multiple import alerts by the United States Food and Drug Administration (US FDA).

“According to the latest import alert dated Dec 26, 2023 issued by the US FDA, 10 Chinese firms were issued import alerts by the agency in the fourth quarter last year, given that the shipment of medical gloves was found to be in violation of defects detected by the US FDA,” it noted.

https://www.thestar.com.my/business/business-news/2024/01/08/rubber-glove-players-in-for-recovery

I believe when China stops their zero-covid policy, they will be facing the same problem like Topglove. But then again it's China, they can just let go of their workers without compensation. hehehe....

And in comparison to China .... Kossan utilization rate is 50%. Most Msian gloves are in utilization of 50% or below.
China is 90% ... becoz China has zero covid policy and they are still facing covid problem. Most gloves are for their Men-in-White-Suits and of coz doctors. So their gloves are really for internal use.

Many feels that once they stop zero-covid, ASP will be greatly suppressed bcoz China will have higher capacity to export out. I totally disagree bcoz if this is true, then China should run at 100% utilization rate.

I believe when China stops zero-covid policy, their utilization rate will be in line with Msia's rate of 50%.

I take Harta to be the benchmark. Kossan is more valuable than Harta ... In my humble opinion.
Once Kossan hit same price like Harta .. maybe I'll consider to let go. So either Harta comes down to meet Kossan price... or ... Kossan go up to meet Harta. But it's all speculation on my part.. But that's how I decide now bcoz I'm holding for long term investment.

HArta has 3.4bill outstanding shares. Kossan has 2.55bill outstanding share. If overall value of Kossan is more than Harta or even the same ... Kossan shld be price higher than Harta per share basis.

Pre-covid ... all gloves companies are just racing to expand to catch up with TopGlove's capacity. But now is different story. Being too big means higher overhead cost and not profitable.

Post-covid is optimum capacity to be profitable. So Kossan is going for better efficiency in production via automation and reduced workers. They already did that from 6000 workers to 4000. They can keep going to reduce their overhead cost. With their 2 bill cash, they can easily upgrade their production line.

Shld wait after dividend ex-date. 11 Jan 2024.
Price may drop then to buy more.

lazzo88

It's oversold and may be can consider chipping in some now

Hahahaa ... that's a good one bro.
Don't worry. The court case may take 3 years (Comparing to Grab vs MyCC case) before verdict is out.
Profit 120mill per quarter x 12 qtr = 1.44bill. Still good if the verdict comes out either way.

ChekHupCoffee

Mycc must investigate Indian barber cartel. Price has increased to rm15. Pre-pandemic rm10, after rm13. Now rm15.

Did you even get to buy YTL , YTL POWER , RANHILL and IWCITY at the low ?
Some of us bought in at Rm1 for Kossan. 😏

NatsukoMishima

Whole malaysia sapu YTL , YTL POWER , RANHILL and IWCITY tickets now , but u still dreaming in 2020 glove frenzy ! 🤣🤣🤣

I check on this website S!mply W@ll Str33t. replace !=i , @ = a, 3 =e.
Google it. . i3 refuse even post the webiste here.

Dakewlest

Chipee, where to read about affin hwang accumulating kossan stock?

I think rotation play for expectation on recession by EPF. Sime rid of hospital (healthcare) which is resilient during recession and into cars (UMW) which is discretionary and bad during recession.

hhhiii123

Epf dump so much but share price on fire, hehe

Affin Hwang has been accumulating Kossan. Up 1021.23% from their previous holding.

No need to say anything la . Just sue MyCC CEO for defamation for calling LHI a cartel. Kawtim....

gankm

Tan Sri Francis, please come out and say something. This has ruined the reputation of LHI.

GRAB sued MyCC. Took 3 years for verdict for GRAB. SO assuming LHI vs MyCC takes the same period of time ....LHI would have made the profit to cover the fines. But LHI should win if court is fair.

OH another thing more shocking ..... USD went up in PRICE.
MyCC should fine Bank Negara !!! 😂😂🤣🤣🤣🤣😂🤣

Dumb people would probably do it. .... Hahahahaha

Just Googled this ....

Padiberas Nasional (Bernas), a local conglomerate that controls rice distribution, last month announced a 36% rise in the price of imported rice, prompting people to seek out cheaper local rice.3 Oct 2023

MyCC should fine BERNAS.

During COVID, rice price also went up. MyCC didn't fine Bernas. Why?
Chicken and egg go up in price and they attack the 5 companies blaming on chicken feed ... bcoz they are Chinese owned. Racist government is BACK guys.

Chicken feed is made of soy meal and corn. Just like a commodity like rice. All commodity went up in price.

newbie_2018

Ayam, telur mahal because of LHI?

Pakcik Kiah

Pay the price for the crooked profits. I am sure this has been going on for years.

izoklse

In rupanya company pengkhianat negara. no wonder shareholder all selling and run. Government should not only fine 500 Mil. Patut fine 1 Bil and make them bankrupt to teach them and send message to other cartel. You go again govt wish and rakyat wish you will sakit or ditidurkan.

After LHI win the case against MyCC on the fine . LHI should sue MyCC CEO personally for defamation ... calling LHI a cartel.

MyCC can lose in court. Example, Grab won case against MyCC's fine. Leong Hup can win too.
https://www.malaymail.com/news/malaysia/2023/07/06/high-court-quashes-myccs-rm8677m-proposed-fine-against-grab/78251

Ayong21

Any brave soldiers sapu-ing LHI shares ? Company announce will take legal action against Gov Mycc decision. Get popcorn ready and watch show.

I see the price on upward trend. See if it breaks the 1.85 resistance... again.

Another thing from PIBB
Notably, the operating margin for 3QFY23 at 12.18%, has returned to near the prepandemic level.
This is good. :)

The word w@rmer was banned ... 😂😂😂😂🤣 ... replace "a" with "@"
Why?

Wah lau ... I had to filter out one by one to check which word/sentence was censor by i3.

2 good points I'm happy abt from PIBB
- Kossan is set to revamp its old machines and invest in automation, with an anticipated cost >RM100m in FY24F
- Kossan has also implemented workforce reduction, cutting its headcount by c.33% to 4,000 from a total workforce of 6,000 in FY22

Higher productivity and efficiency overall. Catching up with Hartalega. Kossan will show good profitability for now onwards. Kossan actually beat Harta in earnings for Q3.

2 points I disagree with PIBB
- Meanwhile, natural gas cost is expected to climb higher in 1QCY24, attributed to a time lag effect, but it is expected to normalize in the 2HCY24.

Msia Gloves was losing money bcoz natural gas was at USD6 - 9 in 2022. January 2024 contract for natural gas is around USD2.50, which is low and profitable for gloves. Time lag doesn't make sense, Dec contract was higher at USD3. but down to USD2.5 in Jan. Trend is showing downward pricing.

- While we anticipate Kossan to exhibit resilience in the short term, a note of caution is warranted for the long term as China's on-going expansion is likely to further solidify its dominance in the global market, at the expense of Malaysian glove makers’ market share.

Again on quality, especially used in Medical environment. Higher quality also has high shelf life. They can be more choosy now that it's no longer urgent use during COVID time.
Europe and US "de-risking" from China.
China expansion is for China use at the moment. THey are still facing COVID/Pneumonia cases and it's not so much of COVID is serious or not ... it's more of CHina policy of zero-covid target. The gloves are used more by the "men in white suits" spraying and sanatizing the area than doctors.

Why so slow one Topglv qr result? Got a feeling gonna be bad like Supermax. Late qr result also. hai ....

Not just that. Glove seeing recovery in demands.

ryoyagod

Wow, suddenly gloves sector shooting up today. Resurgence of COVID-19 cases?

Nice ... :)

klee
Sounds familiar ? :)

AS for Topglv .... I'm not counting on them for good result. I hope they can pull through but chance are low bcoz of their size. Supermax didn't come out with a good result and they are the same size as Kossan.

KLEE, totally agree. I'm looking at nat gas hovering at reasonable price. I believe Qtr4 would be good. And Jan24 nat gas contract is selling below 2.5 ... we will see better result for Q124. It's all up earning from here forth.

It's the end of the year. These funds are rebalancing their portfolio. Some are taking profit to provide dividends to their investor or for tax purposes. So these selling is no issue. Wait till early next year. I believe more buying will ensue.

It's the end of the year. These funds are rebalancing their portfolio. Some are taking profit to provide dividends to their investor or for tax purposes. So these selling is no issue. Wait till early next year. I believe more buying will ensue.

Ya la .. just checked the MACD .... at breakeven point. Can go higher.

Ya ka? OK lor .. Resistance 2.1 ... I likey :)

Kossan must break resistance 1.85

Then makan ayam from gerai2 lor .... no worries

facsc118
Still boikot mcd and kfc, ayam tak laku di indonesia and malaysia lo

H1N1 not from Malaysia or ASEAN region. Maybe they hv to buy chicken from LHI ....

"Hong Kong has suspended imports of poultry meat and products from parts of the United States, Britain and Poland following outbreaks of highly pathogenic H5N1 bird flu."

https://www.scmp.com/news/hong-kong/health-environment/article/3244721/hong-kong-suspends-imports-poultry-meat-and-products-parts-us-britain-and-poland-following-h5n1-bird

I never trust analyst TP. THey have they own agenda.

ChandranG

Lol, Kenanga's TP is ridiculously low