Oooh, Karex is like Apple now ahhahahaa. Apple was the exception to the rule. If you had the skill to successfully and consistenly pick turnaround companies, you wouldn't be here buying penny stocks would you :-) .

@jacklintan

"...turnarounds seldom turns" - Warren Buffet (^^)

@jacklintan hayoo...still mco meh? Can go out edy lah. Even if MCO, who cares wht malaysians buy?We are a small market. For Karex to make some real money, they need to do well in overseas market with larger population.

Plus you got read Karex annual report or not? Got do proper research or not? Most of their sales dont come from people buying condoms from pharmacy/online. They come from NGOs who buy condoms to prevent HIV in developing countries. Now with pandemic, these NGOs no funding liao. Governments have been redirecting funds to buy covid test kits. Even before the pandemic Karex CEO said in annual report and interviews funding for HIV prevention have been decreasing for the past few years. That's just facts bro..

"Take it easy. Give Karex a break". Lol...Scared the stock price go down is it.. If u lose money not my fault. Nobody asked you to spend money on an over x100+ PE company that's also making loses.

And also, people here have yet to justify why this condom company should rally just because it deals with latex and its product is labelled "medical". Gloves are in demand, not condoms lmaooo...speculators, funny lah u all.

@jacklintan True, but just because it is essential doesnt mean the company providing the product will do well. For example, not all utility companies are good, not all O&G companies are good, not all telekom companies are good. If you look at Karex earnings, definitely not good. There are also other condom manufacturing companies. It's not like Karex has a monopoly despite being the biggest. As they say, "The bigger they are, the harder they fall".

@tean2020 they don't...absolutely nothing from the annual reports that indicates that. They're going strong on expanding their condom business. Some guy from this forum even said friends of his who works in Karex mentioned that Karex does not have the capability to do it. This makes sense. Although easier to make than condoms, the most in demand gloves now are powder-free medical nitrile gloves, which are a bit trickier to manufacture. Thus, Karex won't be able to make it without doing some major adjustments or acquiring new equipment.

@pineapple123 Stock crashes brings bad reputation to a company. Once Karex's stock price crashes (I dont know when, but in the long run, prices generally fall back to fundamentals), people might think there's something wrong with its products, which makes it harder for the company to secure favourable funding for the future.

That's why speculators are such a nuisance. Like it or not, a company needs quality investors to do well.

@sting79 If people start losing their savings once the rubber stock bubble crashes, I'm sure they'll take it out on Karex and its products. No real investor wants that.

Next quarter will be green. Even I will be surprised if they made another loss.

But profit margin will still be very very very low...

Buy buy buy, dont stop!....YOLO

@chcheah Famous last words of a speculator (aka. gambler). God I love the irrational market.

@pineapple123 You're buying shares of CONDOM COMPANY because you believe SANITIZING PRODUCT will be in high demand (which if true, would not make much difference to Karex's profit since they are not making a lot of it)?!?! .......sure..good luck...

Btw, $2.14 billion in 7 YEARS is not a lot. Karex doesnt even have 0.01% market share now lmaooo....

Even if its smart, it's not what is suppose to happen. Their lubricants sales should be strong enough that they dont need to switch to hand sanitizers. CEO promised to make Karex into a competitive sexual wellness company with strong brands in condoms and lubricants, thats the reason they did the IPO, and not to produce hand sanitizers.

Plus, covid-19 will only last a few years, so producing hand sanitizers is not a good long term business. And the price is only high now because of low supply. Once supply of sanitizer picks up, the price will drop. Thats why branding is soo important, which Karex seems to be failing.

I guess their sale of lubricants was bad enough for them to have stopped its production for awhile to make way for hand sanitizers. How their OBM suppose to succeed if like this!?!?..damn sad.

Demand at most is normal, most likely less now. "Extremely strong" is just wishful thinking.

Nope, recession soon. Better put money into defensive stock, not this money losing condom maker.

@gnath_77

"...as well if they're both collective able to supply the shortfall on global stock at the moment, thanks."

Anyone who did actual research would know that the shortfall in supply wasn't because demand got so high that manufacturers were overwhelmed. It was because supply shrunk while demand stayed relatively the same. Why did supply shrink? it was because

1)Condom factories were closed
2)Distribution networks were disrupted.



"the reason i've stated there for MCO is not on the factory operation as i've already stated there on my previous comments if you read (it is on the retail market sentiments on the short rebound based on CEO's previous announcement on MCO impact on the factory op in Q1... ordinary retailers & speculative traders won't look at data, they'll move on news - if you're smart, you'll take the opportunity)"

Soo you're buying this stock because you're hoping that news of the MCO ending will cause this stock to rally due to retail speculators (like you) buying the stock with the assumption that the end of the MCO will cause less disruption in Karex factories, considering that it was the reason for the bad performance in the last QR? If that's true, there is a couple of problems with it:

1) MCO pretty much ended when the CMCO was put in place, which was last April. And Karex did rally after that, but has gone back down. So i'm afraid your ship has sailed. Thus, my comment on you using outdated info.

2) PM already announced that the CMCO is replaced with an even looser RMCO, and this stock still went down today, not up.



"and as for China's condom factory market share & Karex's market share, please read more."

Here's a fact for you. China has about 300 companies producing a combine amount of about 2 billion condoms. Thai Nippon Rubber makes about 3 billion condoms. Karex makes 5.5 billion. And I haven't even mentioned India who,btw, used to supply 50% of durex global condom supply.

And do you know who are one of the biggest customers for these companies? Government funded NGOs who buys condoms to supply them to countries that need them to promote family planning,
prevent STDs, etc. If you've done enough reading, or at least read the last annual report, you'd know that government funded NGOs are buying less and less. Now that there's a pandemic and a looming recession, do you think that they'll buy more or less than usual? Thus my question, why do you think there's a higher demand for condoms?Who the hell is buying?

@gnath_77

Why is there a higher demand? MCO/stay-at-home orders are no longer in place in most parts of the world. The world is no longer in a lockdown.

And what shortage of supply? That was only the case when Karex and condom factories in china were closed or operating at low capacity, which is not true anymore. China reopened about 2 month ago, and Karex has been operating at normal capacity since mid-April.

Seems like your trade is based on outdated info.

Not a good idea. Theres a recession coming soon, you do not want to hold a loss making company. It didn't go past 0.65 in the past 2 years when things were relatively good. So it's unlikely that it will do better now.

@gnath_77 Sure...all the best. I'll be in the sidelines just watching.

Speculators are funny...

@Tryingtogetrich

Hmm, revenue must have increased due to higher ASP as mentioned by HLBank, leading to better gross margin. This is probably because condom factories in China were closed during the Jan-March period. But now that china has reopened, the ASP should decrease. So I dont think the margin will last long, especially if we're expecting a decline in tender market demand due to government shifting resources to handle covid-19.

OBM have been increasing, but it's still only about 20% of total revenue. And most of the gains in their OBM are pro forma gains from acquisitions. Their organic growth is pretty slow. It also has yet to reach scale for it to be profitable. Their expansion into Thailand & Singapore happened only recently (Dec 2019). So I think it's still too early to tell whether it'll be successful. Branding is difficult and expensive. Even Karex CEO told investors it's going to take years for its OBM to segment to be profitable, they're in it for the long term. Thats assuming it'll ever be profitable.

You close your factory for 10 days while still paying your bills of course lah going to be bad. Why people so surprise?? What else did you expect?? I already pointed this out weeks ago. Karex CEO also said it was going to be difficult to restart their factories...If don't want listen to me, sure. But him also you high chasers dont listen, you better go buy unit trust only lh for your own sake.

Sales being higher compared to 3rd quarter previous from year is not a big achievement. During the previous year quarter, Karex was involved in scandal involving misstreatment of its foreign factory workers. This caused its clients to suspend orders.

But on average, revenue have been growing for years. Whether that will continue, especially now with the pandemic and looming worldwide recession is yet to be seen. My worry is that there is going to be a significant decline in tender markets sales. It's likely that Gov funded NGO (biggest client for their sales in the tender marker) are going to be buying less condoms because the government who funds them will provide less funding. In the last annual report, it was already stated that this was already happening.

@Investsuccess Trader

Lol, if you can't handle an opposing argument, just leave and cry somewhere else lah. This is a forum, not a fanboy club.

Go see Top Glove, supermax, Hartalega, Kossan. One stock only lah you know. Obviously you lah more stupid!!

In response to:

cheeseburger glove? go see COMFORT stock today before say who is more stupid.
13/05/2020 4:13 PM

In response to deleted comment:

Cupcakes69 Front-liner want gloves from glove manufacturer, people go buy shares of
condom manufacturer...People are stupid

CMCO can go out liao. Plus the Malaysian market is small, sales here won't do much.

Condom sales slacken in UK and Italy says Durex maker, Reckitt.

https://www.google.com/amp/s/www.dailymail.co.uk/news/article-8275669/amp/Hard-times-Durex-condom-sales-plunge-amid-coronavirus-lockdown.html

karex revenue is highly dependent on the tender market, where organisations like USAID buy karex condom to give for free to poor countries. You think US government want to spend money on other countries now? Not very likely

@cheeseburger

Watch the news, countries in america and europe are slowly reopening. Thailand, and vietnam are also easing restrictions. All big markets for karex.

And the new normal doesn't necessarily mean stay home, not all jobs can do from home. It also means wearing mask, not shaking hands, no crowding, etc.

And what makes you think people will just stay home and fuck? They're also working from home. Only no life people like you think about sex only lmao..

Karex now operating at full capacity. But MCOs being slowly lifted around the world, meaning less people staying at home.

@Investsuccess Thats why you hype hype, you want a lot of traders here to use their cash to buy the stock higher and higher, then you ciao when the stock above your average cost. This small cap stock. A good a RM4 mill can increase the trading volume above average and raise the stock price already. But I'm sure you know this...

Investsuccess Trader is conman lah. Hype hype but give no good reason. If company going bankrupt also for sure hype. You want to jack up the price to close your losing position is it?!?..Cut lost only lah!! Why susah susah tipu orang..

So? Karex is not the only condom manufacturer. And unlike their Thai competitor, Karex is forced to reduce capacity by 50% because of MCO.

March they closed factory for 10 days, made 200 million less condoms to sell. And don't forget they still had to pay social compliance cost. For sure upcoming quarter bad. And management team since last year again buying, so them buying has nothing to do with covid. And just because they buy doesnt mean company will do good, just look at Prestariang CEO. Hayooo research lh more. Otherwise go play online casino only, no difference.

Lmaoo!! Upcoming quarterly report is for Jan-March. They only started making sanitisers in April. Bosuon kopio!

Long time liao the operations has resumed, since last month. All these news people are posting are old and outdated news. And they're only reading the good news. Karex capacity reduced by almost 50% dont want to read, disruption in distribution networks due to global travel restriction also dont want to read, competitor stealing market share by increasing capacity also dont want to acknowledge. Zang hiao cah tai pao ! Chui shui chui dao hoi dou gon hoi ! Bot nya tai lang ! Tonton do bosuon ! Aiso sikul kopio iti vogok !

@probability

Sry, had to delete my comment to fix a typo.

"I certainly agree Airbus bribed other Airline Chiefs...but not those who has the amount of stakes in the company like TF & KM."

I'm rooting for that too sir, hope they're innocent.

@probability

Sry, had to delete my comment to fix a typo.

"I certainly agree Airbus bribed other Airline Chiefs...but not those who has the amount of stakes in the company like TF & KM."

I'm rooting for that too sir, hope they're innocent.

@probability

cool calculations..

"From the above, i cannot see any logic even if 100% of the bribery amount of 200 M went into their pocket..."

TM & KM incurs -10 mil if they took the bribe. However, If they somehow could take 200 mil directly from the company instead of the bribe, they would lose 64 mil (0.32 x RM200 mil), which is more than the RM10 mil lost. So taking the bribe would have cost them less. The worst thing is, whether they take the bribe or not, other investors will also lose value. At least Tony & KM has the RM200 mil to offset their losses.

"will Airbus just for the sake RM 450M gain bribe RM 200M?"
-Idk, but reports said that they did bribe a lot of airlines, not just airasia.

@Daily8

Okey boss...can't wait lmao

@Daily8

Orang British teda sue orang Asia, dia orang sue Airbus, orang putih punya company. Jadi orang putih sue orang putih, bukan orang Asia yang suka ckp england dan mkn kimchi. AirAsia belum kena sue, masih investigating. Kalau kena sue juga, orang Malaysia yg sue.

@Probability

Financial implications aside. If Tony and KM really did accept bribes for their personal gains, it's the integrity of management to fulfill their fiduciary roles to AA is what's in question. Does it really make any sense to put money into a company even if you know management don't even have the decency to not use the company to accept bribes. Bribes for god sake!!

@i_investor

Forgive me, but are you old enough to even be in this forum. Your temperament reminds me of a 10 year old who couldn't handle having someone disagree with them. Looking at my previous comments, it's hard to see how I've patronized you the same may you have patronized me and other people in this forum. So it is really a wonder what have gotten your knickers in a twist.

I do know of the takeover episode of SPSetia, and the circumstances that enabled that takeover to happen does not exist in TopGlove and Karex case. If you don't see that then perhaps you should reflect on your industry knowledge because it's highly likely that you are overestimating your ability.

"SPSETIA is just 1 of many examples" - It wasn't even an example to begin with. You have given non.

And Lim Wee Chai bought just 10.6% of TROP. And he was only able to buy it straight from Tan Sri Danny Tan Chee Sing and his related companies. If he tried to buy it from the open market, it would not have been possible (or at least easy). It wasn't even a take over.


-----------------------------------------------------

"I did not say any "CONFIRMED" over the reports from the Edge and AmInvest, right from beginning, I did not. But It is you youself assumed it is confirmed ! "

You should know that you are just embarrassing yourself, you posted link to NST, The Edge, Aminvest talking about the takeover of Karex by Top glove not just in this page, but also in Top Glove's page. And when I first pointed out how the takeover cannot happen, you pointed to Aminvest and The Edge as "experts". You clearly had full confidence in their articles to confirm your belief that Karex can be taken over by Top Glove. Any reasonable person would have concluded the same of your behaviour. There's nothing between the lines, it is plain obvious you have misunderstood them.

Unless you can clearly explain how I'm wrong, don't expect anyone to take your words seriously. Any decent person knows that a strong argument requires that person to present the logic and evidences used to arrived to his/her conclusion. Making fun of factual figures and calling someone talking 'cock' does not make your argument more compelling. Learn to argue like a mature person. Maybe read up more on Robert Kuok while you're at it, you clearly need it.

@i_investor

In SPSETIA case, PNB (the acquirer) was already the biggest shareholder with about 33.17% shareholding. Not to mention that PNB, being one of the largest fund management companies in Malaysia with asset under management in the hundreds of billions of ringgit) has a lot more capital to make acquisitions. PNB also can easily achieve more than 50% of voting shares of SPSETIA if they are able to buy shares from Employees Provident Fund (13.42%) stake and Kumpulan Wang Persaraan (5%). Both companies under the MoF.

Top Glove, however, is not even the top 10 shareholders of Karex, assuming they have any shares at all. Thus, assuming they even have the money to spare, to buy over 51% of shares where its founders own more than 40% is just implausible. And when it comes to stocks, it is wiser to consider the odds involved and not rely on a belief that everything is possible.

Also, it is possible you’ve misunderstood the reports from the Edge and AmInvest. AmInvest only reported the implication of a takeover by Top Glove, and not confirming it. And The Edge only reported a rumour of Karex being a possible takeover target by TopGlove. Again, it never confirmed it. The Edge even reported that a spokesman from Karex stated that the Goh Family had no intention of divesting. When contacted, Top Glove managing director Datuk Lee Kim Meow brushed off the rumours.

@i_investor

Top Glove will not be able to takeover even if they wanted to. They would need to buy least 51% shareholding which is not an easy task (if even possible) considering the Goh Family already owns over 40%, and this stock is already thinly traded. In other words, the logistics makes it impossible for a takeover.

@Koyee

Thank you for your extensive insight. I'm certain, a lot of people in this page would find it really helpful, I certainly have. With your advise, I may perhaps revisit my previous disinclination for AirAsia.

I apologize if I may had misunderstood your previous post, and I wish you all the best in your investments and in your other endeavours.

@RainT

Sorry, but the prospect of AirAsia going into accumulated loss after a few loss quarters sounds a bit far fetched. I don't think there's much merit in claiming its impending doom.


"to pay dividend, company need to continue making profit and also have cash balance to pay it"

If I'm not wrong, a company is allowed to pay dividend even if they made losses. They only need to make sure the payout wont bankrupt the company.

-------------
@Agjl

Does it though? After the crypto bubble, 2008 crisis, dotcom bubble, great depression , tulip bubble, relying on the market to provide accurate valuation of companies doesn't sound like a very good idea.

@Koyee

Thanks for putting in the time to elaborate MFRS16, and I agree with you in regards to how the accounting expenses does not necessarily equate to cash outflow for the company. Indeed, I'm facing the same backlash for putting emphasis on cash flow as opposed to quarterly profits. So the purpose of my earlier post was not to refute your point concerning the accounting of MFRS16, but to highlight on how a reliance on cash flow may go wrong when evaluating the performance of the company. My mention of depreciation was actually on depreciation of PPE under MFRS 116, and I'm only using it as an example and not to alarm investors to its amount. What i was trying to say is that investors tend to get too caught up with adding back non-cash expenses that they forget that some of those expenses will be reflected in some form or another in the future. Just like how you point out that profit means little if most of them are receivables and in the future might just end up being bad debt, depreciation of PPE for example while is not cash outflow, does give expectation to future cash outflow when buying new PPE to replace the depreciated one. Again, i'm not saying your valuation method is bad, just highlighting how I think it may go wrong. Also, I do share some of your optimism for AirAsia, although not enough to actually buy it. Honestly, the cheaper it gets, the more attractive it looks, so i'm just sitting on the sideline.


"My statement regarding the 0.9 cents dividend is of course relevant to the valuation of the company. When you buy a company one of the most important factor is of course the valuation of it. If AA did not spent 3b plus for the dividend payout they would have COLD HARD CASH of rm5.5b which is almost the same as their market cap which means for every share you own, you own about rm1 cash of it theoretically."

This is intriguing, I do see the appeal of RM1 cash per share, but isn't that only in the hypothetical case that no dividend payout was made? If it was hypothetical, why is it relevant to valuation? shouldn't valuation be based on what has happened and could PROBABLY happen, and not on what could have happened. Honest question!

@Koyee

Frankly, it doesn't make much sense to me for people who like a stock to demand for critics to stay out and stop sharing their thoughts. This is an investing forum after all, where both sides convene to share their findings and opinions, not a fan-club.

With regards to cash flow, while I agree that it has its place in stock analysis, its important to realize that while operating cash flow is derived from adding back non-cash expenses into profit, most of them are expenses nonetheless. Such as depreciation, while they don't pay them now, they will have to pay them at some point in the future by buying new PPE. Also, some cash inflows come from borrowings and not operations, and these aren't exactly the kind of cash inflow you want to see. In Airasia's case, I find it difficult to reconcile the logic of borrowing RM520 million and still pay RM3.4 billions in dividend this year. It seems to me that if they reduced their dividend instead of borrowing, it would have saved them from incurring interest expense. Perhaps I'm missing something, I often do, that's why I appreciate the thoughts of others to shed some light into how I may be wrong instead of condescendingly rebuking them outright.

As for ...

"If AA didnt pay 0.9 div they would have about 5.5b in cash now. that would translate about rm1 cash per share and also AA have 0 debt"...

I'm not quite sure of the relevance of this, they paid the dividend so they don't have RM1 cash per share (not necessarily good thing) and 0 debt.

As for their digital transformation, virtual banking license, teleport, honestly it's anyone's guess at this point whether they will pull it off or not but I'm hoping they do, because whether we own the stock or not, thriving businesses is always in the our best interest. I have a BigPay card, love it because it benefits me personally, but I'm not buying the stock.

This dividend would result in more than RM10 million in cash outflow. Not bad but not good either, I'd prefer they give a smaller 0.5 sen along with less director's remuneration. But they could handle it so I'm not alarmed.