aiyo Purebull, this 2999 + 1 people are all static kah? can only buy one time, sell and never look back?

in reality buyer no.1 can turn out to be buyer no. 2999 + 1....

Supermax Outlook:
==========

Plant 12 consists of Block A and Block B, each consisting of 8 double former lines with 2.2b pieces each (total 4.4b pieces).

As of now, for Block A, its remaining 3 lines started commissioning in end March 2020 on top of the 5 lines already in commercial production.

For Block B, all 8 lines are expected to be fully commissioned by 2H 2020. Upon full commercial production by 2H 2020, installed capacity will rise 13.4% to 26.2b pieces per annum.

............

Recall, it had completed the acquisition of a piece of land in Meru, Klang on which it plans to build three plants namely Plant 13,14 and 15 which will contribute another 12bn pieces of gloves to its total installed capacity over the next few years.

The 3 plants would add 12.0 billion pieces per annum to the Group‟s installed capacity from 26.18 billion gloves to 38.18 billion gloves when these 3 plants have completed commissioning and in commercial production fully by CY2022.

............

On March 11th , 2020, the Company had also entered into an agreement to purchase another piece of industrial land in Meru, Klang, on which the Company plans to build plant #16. Construction work has already commenced on 2 plants and work on a 3rd plant would commence soon.

............

Total = 42 Billion gloves/annum

Truth is in the pudding

.......................

Moderna unveiled encouraging coronavirus vaccine results. Then top execs dumped nearly $30 million of stock

May 22, 2020

https://edition.cnn.com/2020/05/22/investing/moderna-coronavirus-vaccine-stock-sales/index.html


New York (CNN Business)Moderna's stock price skyrocketed as much as 30% on Monday after the biotech company announced promising early results for its coronavirus vaccine. As ordinary investors piled in, two insiders were quietly heading for the exits.

Moderna's chief financial officer and chief medical officer executed options and sold nearly $30 million of shares combined on Monday and Tuesday, SEC filings reviewed by CNN Business show.

The sales occurred after Moderna (MRNA) excited Wall Street before markets opened Monday by announcing encouraging vaccine trial results. Moderna's market value swelled to $29 billion -- even though the company has no marketed products.

After spiking to as high as $87 on Monday, Moderna's stock price has since retreated below $70 as medical experts have debated the importance of the early findings.

Philip sifu, kindly enlighten all of us here what special characteristics that a company like Harta has against Supermax to cause such difference in PE.

Exclude the recent effects of Covid 19, i believe it boils down to competitive advantage concept you had introduced in i3

please break it down for us to digest...

TQ

Just curious to know, why did Supermax venture to Brazil far ahead of covid 19? There must huge demand there naturally. but could not figure out the reasons...

Posted by Fabie > May 23, 2020 9:41 AM | Report Abuse

In Supermax's 2019 Annual Report, the only investment in associate which is not impaired is Supermax Brasil Importadora S/A whose principal activity is Marketing, importing and distributing latex gloves with a stake of 50%.

May be Supermax should buy a Rubber plantation too, so that they can have their own latex - will be useful to gain competitive advantage at times when oil price shoots up raising raw material Butadiene price (synthetic rubber)

automated , self check in / check out at immigration will the future everywhere...may be they will combine with a temperature sensor

If you go to any pharmacy (my experience in overseas), they sell you gloves in boxes, if you check the brand, it has a local company name.

The name is something that you have not heard of - no connection to Malaysia, but the gloves are definitely from Malaysia.

This shows the distributors buy from Malaysian glove makers and hike up with a significant margin to make money themself (likely much higher margin than the manufacturers).

As such, if you can have your own brand (OBM) like Supermax, it would certainly make a huge difference on profit.

Most importantly, it means Supermax has the competitive advantage of killing other distributors (competitors) being the manufacturer themself.

This vertical integration is indeed very powerful.

There would be no reason for PE rating of Supermax to be not comparable to other big players like HARTA

I think Philip did the the right thing to sell Topglove........but he should be buying Supermax

@Tangmonk, thanks for sharing the above

Post removed.Why?

Post removed.Why?

One of the best comments

Posted by freetospeak > May 21, 2020 2:47 PM | Report Abuse

topglove market cap =30 billion
profit 373 million/4 = 93 million/ qtr

Supermax market cap = 7.2 billion
profit going to be (71 +100 +100+100)/4 = 92 million /qtr

(30/7.2) = 4.1
Supermax = 5.3 x 4.1= rm 21.73

either Supermax is undervalued or topglove overvalued.
either supermax will go up to c big brother or big brother coome down to sit down with supermax.
Or we prefer to meet halfway drink tea?

Director is hinting the share price to be respected like HARTA

whats happening here...king of goreng stock?

hoping the same....this should be above 1

i know charlesT sifu...if he intro another sifu...i must accept this sifu as great too


Posted by CharlesT > May 22, 2020 3:41 PM | Report Abuse

Freetospeak u r the real sifu in supermax

low oil price will suppress Butadiene Rubber (raw material for Nitrile gloves)....

Natural Rubber:

http://www.sunsirs.com/uk/prodetail-586.html

Butadiene Rubber:

http://www.sunsirs.com/uk/prodetail-358.html

From the above charts, you can see their price difference which is diverging , means margin will expand further for Nitrile Gloves in coming quarters

If you go to any pharmacy (my experience in overseas), they sell you gloves in boxes, if you check the brand, it has a local company name.

The name is something that you have not heard of - no connection to Malaysia, but the gloves are definitely from Malaysia.

This shows the distributors buy from Malaysian glove makers and hike up with a significant margin to make money themself (likely much higher margin than the manufacturers).

As such, if you can have your own brand (OBM) like Supermax, it would certainly make a huge difference on profit.

Most importantly, it means Supermax has the competitive advantage of killing other distributors (competitors) being the manufacturer themself.

This vertical integration is indeed very powerful.

There would be no reason for PE rating of Supermax to be not comparable to other big players like HARTA

not Trump, Bolsonaro this time..

Posted by pang72 > May 22, 2020 10:26 AM | Report Abuse

Is Trump call Ah din to sapu all Supermx glove again???


Haha..

Supermax Corporation - Two Bets for the Price of One
Date: 22/05/2020

Source : KENANGA
Stock : SUPERMX Price Target : 7.60

We are excited with Supermax prospects over the next few quarters following a 3QFY20 post result briefing. Specifically, Supermax is expected to gain from higher margins from both its gloves manufacturing and distribution channels due to abnormal demand and acute supply tightness. We expect higher margins going forward due to higher product mix skewed towards OBM distribution which accounts for 95% compared to 70% pre Covid-19 which we believe had caught us as well as market by surprise. Hence, we raised our FY20E/FY21E net profit by 6%/16%, to account for higher margins. TP is raised from RM6.60 to RM7.60 based on unchanged 26x CY21E EPS. Reiterate OP.

Dual-stream incomes from manufacturing and distribution. Specifically, Supermax is expected to gain from higher margins from both its gloves manufacturing and distribution due to abnormal demand and acute supply tightness. We expect higher margins going forward due to higher product mix skewed towards OBM distribution which accounts for 95% compared to 70% pre Covid-19 which we believe had caught us as well as the market by surprise at a time when of tight supply due to aggressive stockpiling of critical medical supplies including gloves. Typically, manufacturing OEM pre-tax margin ranges between 12% to 15% compared to Own Brand Manufacturing (OBM) pre-tax margin of 15% to 20%. In terms of demand, Supermax is getting enquiries from foreign government agencies, non-government organisations, retail and restaurants chains. Amplifying the pent-up demand, buyers are paying between 30% to 50% deposits in advance to secure glove supply and timely delivery. The delivery lead time has now risen from 45 to 60 days pre Covid-19 to 10 to 12 months currently. Case in point is Supermax’s overseas distribution centres which are experiencing fast inventory depletion from usual 4 months to within 6 weeks. Supermax expects the heightened demand to continue for the next 1 to 1.5 years. All in, we are bullish on higher-than-expected margins since ASP has been moving upwards week-on-week. As demand pick up, containers are shipping at prices higher than previous months.

Outlook. Plant 12 consists of Block A and Block B, each consisting of 8 double former lines with 2.2b pieces each (total 4.4b pieces). As of now, for Block A, its remaining 3 lines started commissioning in end March 2020 on top of the 5 lines already in commercial production. For Block B, all 8 lines are expected to be fully commissioned by 2H 2020. Upon full commercial production by 2H 2020, installed capacity will rise 13.4% to 26.2b pieces per annum.

Raised FY20E/FY211E net profit by 6%/16% after raising our pre-tax margin from 13%/14% to 16%/18%.

Undemanding FY21E PER valuation of 18x compared to expected earnings growth of 68%. Correspondingly, our TP is raised form RM6.60 to RM7.60 based on unchanged 26x CY21 revised EPS of 25.4 sen (at slightly above +2.0SD above the 5-year historical forward mean). We like Supermax because: (i) the stock is trading at an undemanding 18x FY21E EPS compared to expected earnings growth of 68%, and (ii) of its OBM model, where it can extract higher margin from distributor prices, compared to the OEM model at lower factory prices. Reiterate Outperform. Key risk to our call is longer-than-expected commercial operations of new plants.

Source: Kenanga Research - 22 May 2020

Kenanga raised TP : 7.60

@Energizer, thanks. Fantastic!

anyone have the link?

Posted by Energiser > May 22, 2020 8:43 AM | Report Abuse

CIMB latest TP is RM 7.

Basically, is your FCF used above , FCF-F or FCF-E?

DCF = RM 9,835.93 (HAI DUONG)

JAKS 30% = RM 2,950.77m

............


The above DCF value is total asset value right?

If that is the case, wouldnt you need to offset the Debt (NPV) to get the Equity portion value first - before multiplying 30% stakes of JAKS on the Equity to obtain the share price?

To calculate Cash Flow using DCF method (IRR 17% & 12% respectively)

Formula : DCF = CF1/(1+r)^1 + CF2/(1+r)^2 + ...+CFn/(1+r)^n

..................

ehome009, thanks for sharimg.

Is the above method used by MBB & PBB to determine MFCB's FCF?

Is that something standard?

Wouldnt it be more accurate using the expected outflow & inflow of cash as per the predicted timelines of the project? Meaning the 'timing' of these cash flows can differ greatly between MFCB and JHDP right?

I got the answer:
.................

Supermax has 50% of its gloves as Nitrile & 50% as Latex gloves

Comfort has 85% of its gloves as Nitrile & 15% as Latex gloves

This means Comfort has the chance of even greater margin expansion by additional up to 5% (compared to Supermax) for the qtr ending Mar 20.



Demand for gloves expected to rise

October 03, 2019

https://www.theedgemarkets.com/article/demand-gloves-expected-rise


Although we are positive on the growth in the subsequent quarters, underpinned by an uptick in nitrile demand driven by restocking activities, players like Top Glove and Supermax could continue to be plagued by competitive pressure from low-margin latex gloves (accounting for an estimated 50% of the product mix of both players), which could offset gains in the nitrile segment.

Below is extract from Supermax qtr report released today.

They stressed Nitrile raw material cost reduced 11% year on year.


................

The demand of gloves has exponentially increased this year amid the global COVID-19 pandemic. The surge in demand has resulted in a rapid rise in average selling prices (ASPs), as buyers rush to secure their supply of personal protective equipment (PPE), including medical gloves.

As a result of the outbreak, the prices of oil and raw materials have fallen. Specifically, nitrile and natural rubber material prices have decreased by 11% and 6% respectively Year-on-Year,and 7.3% and 2.5% respectively Quarter-on-Quarter.

At the same time, the USD has strengthened against the MYR, by 2.18% Year-on-Year and 0.36% Quarter-on-Quarter.

The current market conditions favour Supermax Group, and our outlook is expected to remain strong for at least the next 1.5 to 2 years, while a vaccine against COVID-19 is still under development.

Following the outbreak of COVID-19 globally, the Company is seeing the emergence of new consumers and new consumption not previously seen. The pandemic has resulted in a demand surge for PPE products, including medical gloves.

The use of these protective and infection control products has expanded beyond healthcare and frontline workers to also include the general public.

Our usual 4-month working inventory at our distribution centres were sold within 6 weeks and at higher ASPs.

Supermax Group‟s Glove Manufacturing Division is strongly positioned for this opportunity to boost earnings and expedite and its capacity expansion plans.

The Company is building 3 new factories in tandem, allowing us to capitalize on the exponential growth in demand of medical gloves.

Rf888, i never fought with market....just that market was more intelligent & informed unlike me

eat humble pie now

Posted by Rf888 > May 20, 2020 5:23 PM | Report Abuse

Probability: now how your feelings? Want fight with market?

welcome Henry8833

Comfort is 85% Nitrile gloves.

Anyone know Nitrile gloves fraction of Supermax?

Posted by Henry8833 > May 20, 2020 3:08 PM | Report Abuse

Thank you Probability for the info. We are more certain that profits will jump a lot, not only costs, but ASP, and shortage of gloves in the international market.


probability IMPORTANT INFORMATION:
......................

Nitrile Gloves - raw material is 'Acrylonitrile-Butadiene Rubber'

The below article shows the price had decline 17% compared to mid of last year.

It dropped minimum another 10% just from Feb 2020 to March 2020! Infact it dropped from 16.000 RMB/ton to 12,800 RMB/ton. Huge plunge!

This means, even Without raising price of Gloves, Nitrile gloves manufacturer margins would expand by 10% from qtr ending Mar 20 results currently.

..............

SunSirs: Acrylonitrile-Butadiene Rubber Price Fell　

April 01 2020

http://www.sunsirs.com/uk/detail_news-2073.html

Analysis Points: Today (On March 31) domestic nitrile rubber transaction was light, and the mainstream average price was 14200 RMB/ton. According to SunSirs, the domestic nitrile rubber market prices fell. Langhua nitrile N41, 3305, 3308 mainstream prices were at 11,900 RMB/ton, 12,800 RMB/ton, and 12,900 RMB/ton respectively.

Posted by infinity888 > May 20, 2020 5:09 PM | Report Abuse

next QR will be even better imagine


Posted by probability > May 20, 2020 12:54 PM | Report Abuse X

Raw material for Nitrile Gloves is purely (100%) Acrylonitrile-Butadiene Rubber.

30 July 2019 price: 17,700 RMB/ton

30 March 2020 price: 14,200 RMB/ton

30 April 2020 price: 12,000 RMB/ton

Current price (May 20'): less than 11,900 RMB/ton


http://www.sunsirs.com/uk/detail_news-2073.html

Analysis Points: Today (On March 31) domestic nitrile rubber transaction was light, and the mainstream average price was 14200 RMB/ton. According to SunSirs, the domestic nitrile rubber market prices fell. Langhua nitrile N41, 3305, 3308 mainstream prices were at 11,900 RMB/ton, 12,800 RMB/ton, and 12,900 RMB/ton respectively.

......................................


I think next qtr results will be Super-explosive.....

Rambo8333 sifu, what can i do...

i am still learning...continuously gathering information and sharing...

as available information change, our decisions change

do not scold the informer..but the information

TQ

Raw material for Nitrile Gloves is purely (100%) Acrylonitrile-Butadiene Rubber.

30 July 2019 price: 17,700 RMB/ton

30 March 2020 price: 14,200 RMB/ton

30 April 2020 price: 12,000 RMB/ton

Current price (May 20'): less than 11,900 RMB/ton


http://www.sunsirs.com/uk/detail_news-2073.html

Analysis Points: Today (On March 31) domestic nitrile rubber transaction was light, and the mainstream average price was 14200 RMB/ton. According to SunSirs, the domestic nitrile rubber market prices fell. Langhua nitrile N41, 3305, 3308 mainstream prices were at 11,900 RMB/ton, 12,800 RMB/ton, and 12,900 RMB/ton respectively.

Raw material for Nitrile Gloves is purely (100%) Acrylonitrile-Butadiene Rubber.

30 July 2019 price: 17,700 RMB/ton

30 March 2020 price: 14,200 RMB/ton

30 April 2020 price: 12,000 RMB/ton

Current price (May 20'): less than 11,900 RMB/ton


http://www.sunsirs.com/uk/detail_news-2073.html

Analysis Points: Today (On March 31) domestic nitrile rubber transaction was light, and the mainstream average price was 14200 RMB/ton. According to SunSirs, the domestic nitrile rubber market prices fell. Langhua nitrile N41, 3305, 3308 mainstream prices were at 11,900 RMB/ton, 12,800 RMB/ton, and 12,900 RMB/ton respectively.

Synthetic rubber ( raw material for Nitrile gloves ) dropped 21%

http://www.sunsirs.com/uk/prodetail-358.html

Synthetic rubber ( raw material for Nitrile gloves ) dropped 21%

http://www.sunsirs.com/uk/prodetail-358.html

Nitrile gloves will be leveraged by Latex gloves manufacturer.


Natural rubber (latex) dropped 11%

http://www.sunsirs.com/uk/prodetail-586.html

Synthetic rubber (Nitrile) dropped 21%

http://www.sunsirs.com/uk/prodetail-358.htm


.............


This means even if Nitrile gloves sold at the same price of Latex, margin difference would be 10%

Note Nitrile gloves are more useful with robust resilient application demanding a premium against latex as they are chemically more resistant to damage

Nitrile gloves will be leveraged by Latex gloves manufacturer.


Natural rubber (latex) dropped 11%

http://www.sunsirs.com/uk/prodetail-586.html

Synthetic rubber (Nitrile) dropped 21%

http://www.sunsirs.com/uk/prodetail-358.htm


.............


This means even if Nitrile gloves sold at the same price of Latex, margin expansion would be 10%

Note Nitrile gloves are more useful with robust resilient application demanding a premium against latex as they are chemically more resistant to damage

http://www.sunsirs.com/uk/prodetail-358.html

Those manufacturers who produce synthetic gloves (Nitrile) will have a double whammy margin expansion

Those manufacturers who produce synthetic gloves (Nitrile) will have a double whammy margin expansion

Butadiene-rubber is the raw material for synthetic gloves

Butadiene Rubber price dropped 21% from Feb 20 now:

http://www.sunsirs.com/uk/prodetail-358.htm

Butadiene-rubber is the raw material for synthetic gloves

Butadiene Rubber price dropped 21% from Feb 20 now:

http://www.sunsirs.com/uk/prodetail-358.html

http://www.sunsirs.com/uk/detail_news-2073.html

IMPORTANT INFORMATION:
......................

Nitrile Gloves - raw material is 'Acrylonitrile-Butadiene Rubber'

The below article shows the price had decline 17% compared to mid of last year.

It dropped minimum another 10% just from Feb 2020 to March 2020! Infact it dropped from 16.000 RMB/ton to 12,800 RMB/ton. Huge plunge!

This means, even Without raising price of Gloves, Nitrile gloves manufacturer margins would expand by 10% from qtr ending Mar 20 results currently.

IMPORTANT INFORMATION:
......................

Nitrile Gloves - raw material is 'Acrylonitrile-Butadiene Rubber'

The below article shows the price had decline 17% compared to mid of last year.

It dropped minimum another 10% just from Feb 2020 to March 2020! Infact it dropped from 16.000 RMB/ton to 12,800 RMB/ton. Huge plunge!

This means, even Without raising price of Gloves, Nitrile gloves manufacturer margins would expand by 10% from qtr ending Mar 20 results currently.

..............

SunSirs: Acrylonitrile-Butadiene Rubber Price Fell　

April 01 2020

http://www.sunsirs.com/uk/detail_news-2073.html

Analysis Points: Today (On March 31) domestic nitrile rubber transaction was light, and the mainstream average price was 14200 RMB/ton. According to SunSirs, the domestic nitrile rubber market prices fell. Langhua nitrile N41, 3305, 3308 mainstream prices were at 11,900 RMB/ton, 12,800 RMB/ton, and 12,900 RMB/ton respectively.

Even Cargo company transporting gloves raise price by 50%, why not the direct chemical suppliers for gloves?

https://www.theedgemarkets.com/article/malaysian-state-cargo-carrier-profits-soaring-demand-medical-gloves

The company raised freight rates by as much as 50% in some cases and added capacity on high-demand routes as it also saw high-volume shipments of face masks and medical gowns during the coronavirus pandemic, Chief Executive Ibrahim Mohamed Salleh told Reuters. The company declined to give profit figures.

https://klse.i3investor.com/servlets/ptres/55146.jsp

We believe we have under-estimated the potential impact from higher-than-expected ASP and margins from OBM distribution amidst the current tight supply situation for gloves with buyers aggressively stockpiling critical medical supplies. Hence, we raised our FY20E/FY21E net profit by 8%/34%, to account for higher ASPs and utilisation. TP is raised from RM4.50 to RM6.00 based on unchanged 26x CY21E EPS. Reiterate OP.

Abnormal demand leading to acute shortage and higher-thanexpected ASP. We believe we have under-estimated the potential impact from higher-than-expected ASP and margins from OBM distribution at a time when supply is tight due to aggressive stockpiling of critical medical supplies of which gloves is one. The lead time has widened further from 90 days to 150-200 days indicating that demand is far outstripping supply at least over the medium-term. We highlight that Supermax’s potentially higher margins, achieved via distribution from its Own Brand Manufacturing (OBM), is greatly under-appreciated. The potentially higher margin for Supermax’s stems from its associates’ (in Brazil, Australia, Europe and Canada) distribution channels and marketing under its own brands (such as Aurelia and Maxter)., However, we are more bullish on higher ASPs in 2H 2020 due to the present tight situation of buyers jockeying for position to secure allocation.

Outlook. Plant 12 consists of Block A and Block B, each consisting of 8 double former lines with 2.2b pieces each (total 4.4b pieces). As of now, for Block A, its remaining 3 lines started commissioning in end March 2020 on top of the 5 lines already in commercial production. For Block B, all 8 lines are expected to be fully commissioned by 2H 2020. Upon full commercial production by 2H 2020, installed capacity will rise 13.4% to 26.2b pieces per annum.

Raised FY20E/FY211E net profit by 8%/34% after raising utilisation rate from 80%/93% to 85%/97%. We raise our ASP from USD23/1,000 to USD23.80/1,000 in FY20 and from USD23/1,000 to USD32/1,000 pieces in FY21.

Undemanding PER valuation of 21x compared to 80% earnings growth. Correspondingly, our TP is raised from RM4.50 to RM6.00 based on unchanged 26x CY21 revised EPS of 23.0 sen (at slightly above +2.0 SD above 5-year historical forward mean). We like Supermax because the stock is trading at an undemanding 20x FY21 EPS compared to earnings growth of 80%. Reiterate Outperform.