https://www.globaltimes.cn/content/1199243.shtml

Four Chinese vaccines are in stage 3 trials. This will undoubtedly rattle the uninitiated. Logical and careful analysis will yield the common-sense conclusion that vaccines will not collapse the demand for gloves. In fact, not even the cessation of the pandemic will crash the demand. The demand for gloves will continue to rise well after Covid-19 is behind us. What will normalize the ASP are capacity expansions by both current players and new comers. But even as the ASP retreats over the next several quarters, Supermax earnings will be mitigated by the corresponding rise in capacity. This has the effects of smoothening the earnings and bringing them to a soft landing. Among the glove players, I believe, Supermax, with its OBM, is best positioned to maximize its margin going forward.

The price of gloves will not stay elevated forever. Neither will it fall back to pre-covid era. This is because the demands for gloves have shifted (Econ 101). America, Europe and Japan with only 20% of world population used to consume 70% of gloves. With covid, the rests of the world are waking up to the use of gloves. Not only that, the use of gloves has also spread to other industries.

Based just on known factors, my estimates for Supermax earnings are as follows (I believe the earnings projections are conservative with potential for upside):

FY21: earnings - Rm3.4 billion, average capacity - 24 b per quarter, ASP range - USD80-95;

FY22: Rm3.4 billion, 31.3 b, USD65-85;

FY23: Rm2.5 billion, 42.4 b, USD45-55.

With this as guide, I hope you can stay calm with the vaccine brouhaha raining down on you intermittently. Just train your sight on earnings and nothing else. See you all at Rm20-25 post bonus.

NOTE: JUST BASED ON FY23 EARNINGS AND A NORMALIZED PE 30X, SUPERMAX SHARES ARE ALREADY WORTH RM28 PER PIECE!

wickedlion @omione Interesting observation and comment. I believe your comparison is a bit unrealistic when nestle has been making on average around the same PAT and EPS for many years but Supermx was just last quarter when pandemic just started. If supermx were to reach as high as Nestle, demand for glove must retain the same level for many years to come. Is it realistic to think this pandemic will continue that long?

*************************************************************************

Yes, my friend. Supermax earnings potential is not just a flash in the pan. The Covid has structurally shifted the demand curve for gloves. The growth of glove usage will continue long after the Covid pandemic is behind us. I project that in FY23, with ASP of just USD45 and capacity utilization of just 80%, Supermax will still be able to rack in PAT of Rm2.5 billion, representing an EPS of Rm1.80. Remember, Supermax current capacity is only 21.7 billion. In FY23, that capacity will be 48.4 billion.

The point is not the eventual fulfilment of the Rm100 price for Supermax vis-à-vis Nestle. It is an illustration of how ridiculously out of whack the current valuation is for Supermax. The Rm100 price is by no means impossible, though the numeral Rm100 may not be actually attained. Supermax will continue to split the shares as valuation rises in order to enhance liquidity. But if you index the current 1.36 billion shares outstanding, just maybe, in the not too distant future the implied Rm100 may become a reality. The fundamentals are there. It’s about earnings multiples.

For now, forget the Rm100. It is sufficed just to know that Supermax is deeply undervalued.

Posted by JohnFarmer458 > Aug 29, 2020 4:13 PM | Report Abuse
@Kendo Ken Hz Completed the break out macd last Friday
, uptrend to 30 in sight
29/08/2020 4:04 PM

alot of chartist said the chart indicate that supermax will break rm30 , seems like its really coming . Congratulations to all holders

**********************************************************************************

Forget about charting.

Nestle FY21 PAT will not exceed Rm600m – EPS less than Rm2.50. Yet it last traded Rm139 per share.

Supermax can easily make PAT Rm3.4 billion in FY21. That is EPS Rm2.50. And, a chartist says it will only break Rm30? Someone needs to go back to basic investment school!

With an exponentially growing company like Supermax, the market should be valuing it at least 40x. That will be Rm100. Why do you think some investors just gobbled up 28.4 million shares at the closing on Friday? Nobody with Rm600 million to blow are that stupid. So stop listening to the gloom and bust nincompoop. Just train your sight on earnings. That’s all.

PETDAG earns EPS 0.4 sen (previous quarter EPS -3 sen), and stock price Rm21.22.

Supermax earned Rm400m (EPS 30.8 sen) and next quarter projected to earn 60-75 sen. Stock price? 19.80.

Supermax is way, way, way undervalued. Ambank which opined that Supermax was fully valued should close shop.

Nestle just announced its 2Q results - EPS of 45 sen. Yet it trades at Rm140. Supermax 1Q EPS will easily exceed 60 sen. Even if the price hits Rm70, it will still be less than half as expensive as Nestle. Supermax at current setting is truly undervalued.

I wanted to know in the event ASP in FY23 declines, what will be the fair value of Supermax shares be? And what I found is nothing short of shocking. The current selldown of Supermax is absolutely ridiculous. It’s simple NUTS.

I’ve done the FY21, FY22, and FY23 estimate based on conservative assumptions. I still come up with the following EPS (based on current 1.36b share outstanding):

FY21 Rm2.52
FY22 Rm2.47
FY23 Rm1.85

Look. I intentionally left out the Rm120m profit Supermax claimed it did not capture in time for 4Q20. If this was included in FY21, the EPS would have been Rm2.61.

Bear in mind that certain analyst reported that the ASP in Jun 2020 already hit USD120 per thousand. Here I only assume an ASP of USD90 for FY21.

Also the cost reported in 4Q20 was 39% of revenue. Yet in this exercise I assume a higher ratio. This is to account for teething problems with new production lines coming into operations after Dec 2020.

Let’s ignore the sterling results of FY21 that most of us expect. Even if EPS for FY23 declines as projected here to Rm1.85 (with the assumption that ASP will decline to USD48), the Rm16.70 closing price today still jarringly missed price Supermax. It’s NUTS!

Can a fast growing company like Supermax be priced at just PE 6 to 9? Frankly, if the investment banks are not picking up this jarring mispricing, they should just close shop.

[I would love to support the above comments with my Excel Spreadsheet. But I don't seem to be able to post it. Will appreciate if someone can tell me how to do it.]

OTB,

I am a recent fan of yours. I enjoy reading your opinions on stock investment. Even for an advanced and seasoned investor like me, I really find your inputs extremely helpful. Similarly, I also find KYY’s writings very insightful. I think both of you are extremely successful and wealthy investors. There are certainly much I can glean from your foresights.

Reason I write is to let you know that there are far more silent majority out there who truly appreciate your generous sharing. Of course, like any statistical aberration, there are also some who, for whatsoever warped reasons, chose to attack you. In my humble opinion, such uncalled for attacks are wholly unnecessary. You share your opinions. It is up to me to make use of them for my benefits or set aside if I don’t find them useful. Every investor ought to be able to form their own conclusion based on whatever information they can glean from the market place. Only losers need to exert their inflated egos to attack others so that they can feel their pea brains are bigger than yours. You know, we’ll have your back.

6 vaccines already in 3rd stage trial. But Supermax earnings will hold its ground. Even if vaccines pass stage 3, implementing the inoculations may not necessarily run in a straight line. There's still uncertain time ahead for vaccines. But an outsized profit awaiting Supermax 1Q21 is more certain.

Russian vaccine is a HOAX!

https://www.nbcnews.com/science/science-news/reckless-foolish-why-russia-s-vaccine-has-experts-alarmed-n1236466

Let’s be real and not trade with fear. The FY20 is over. Let’s look forward to FY21. What will the profit be for the next 4 quarters? Supermax clearly stated in the Q4FY20 report just past that the full extent of the price increase had not been factored in. That means profit for Q1FY21 is expected to be much better than 400m. Let’s assume conservatively that the Q1FY21 profit is only 700m. And thereafter, the profit increases by just 100m per quarter.

Profits:
Q1 700m
Q2 800m
Q3 900m
Q4 1b

Total FY21 profit 2.4b

Bear in mind. Given this conservative scenario, we have not added the new 4.4b capacity coming on-stream by the end of Q2FY21. The closing price today is 18.88. Based on this price, the forward FY21 PE is only 10.7x.

Is it logical for a rapidly growing stock like Supermax to be trading at PE 10.7x? It’s nuts! Something is seriously wrong with the 18.88 pricing. It’s way oversold. The market will soon self-correct. No doubt based on the chart, it is likely the market may continue to sell-down in the early trading session tomorrow.

What is the reasonable PE for a rapidly growing stock like Supermax? It should be at least 50x!

But let’s be very conservative. Let’s price it at PE 25x. At PE 25x, Supermax price should be 44. At PE 50x, it will be 88. Impossible? What if the earnings are better than the conservative 2.4b? What if we impute the 4.4b additional capacity from Q3 and Q4?

You’ll begin to see a 3b profits for FY21 is not so ridiculous.

So once this vaccine nonsense is over, the price will very quickly climb to 44. I won’t be surprised if this is achieved before the bonus and share dividend ex-date in Sep. Trade with facts, not fear and you will win all the time.


########### TARGET PRICE MINIMUM RM40 PER SHARE ##########

For uninitiated, the news of Russian vaccine may rattle the market tomorrow. It is actually old news. I read about it a week or so back, accept now Wall St makes it a major news. In truth, the Russian vaccine has only 'completed' stage 2 (and without published results), and it's only preparing to go into stage 3. A number of Chinese vaccines are already in stage 3. The only exception is Russia allows the vaccine to be registered after dubious stage 2. This is Wall St 'siouk sendiri'.

AirAsia is toast. 1st quarter losses were Rm800m, even with about 80% of the previous quarter's revenue. Q2 from Apr-Jun will have less than half of the Q4 revenue. AirAsia will easily incur more than Rm1b losses. Going forward, few will fly. With covid expected to last a long time, airline business is being devastated. Virgin already gone bankrupt in Australia and the US. Even if AsiaAsia can prevail, its share price will be crashed to 10 sen or worst before it gets better. 50 sen per share now is still a lot better than 10 sen in a few months. Preserve you capital while you still can. Run.

I have warned you before.


Stock: [AIRASIA]: AIRASIA GROUP BHD

Jul 2, 2020 1:47 PM

AirAsia share is toast. EPF cut losses and ran. Warren Buffett did the same with airlines shares. AirAsia still can't get its Jan-Mar QR out. Imagine how bad the QR for Apr-Jun will be? Run on the next rally, should there be one. Should have cleared out on Jun 10. Budget airlines like AirAsia need volume to make a profit. That is not going to happen as long as the virus problem is not solved. God luck.

https://www.globaltimes.cn/content/1194728.shtml

Chinese vaccine candidate effective against all known coronavirus strains: Sinopharm

https://www.globaltimes.cn/content/1194728.shtml

Chinese vaccine candidate effective against all known coronavirus strains: Sinopharm

Top Glove suspended. Should be good for all other glove counters

lussuoso Prefer chart vendor with local offices. Please suggest alternatives. Thanks.

Does anyone know of a charting tool that is as good or better than Bursa Station? Bursa Station is good but it hangs all the time when the market gets heated up.

Does anyone know of a charting tool that is as good or better than Bursa Station? Bursa Station is good but it hangs all the time when the market gets heated up.

This is a mess. And it doesn't end here. Next quarter is going to be even more horrendous. Quarter after that may improve slightly, but AA will still be mired in red ink. The red ink will continue for the rest of 2021. With luck, may be 2022 will be in the black. By then the share price would have been degraded to 20-30 sen. It's tough decision for those who are caught. But this is certainly not the time be irrational, unless you know how to trade profitably all the way down. For those who can't, it is certainly not a good idea to double down. I do not own AA shares at this time. I am a value investor. At some point, I may buy into AA. That time has not come. It bleeds my heart to see people lose their hard-earned money.

AirAsia share is toast. EPF cut losses and ran. Warren Buffett did the same with airlines shares. AirAsia still can't get its Jan-Mar QR out. Imagine how bad the QR for Apr-Jun will be? Run on the next rally, should there be one. Should have cleared out on Jun 10. Budget airlines like AirAsia need volume to make a profit. That is not going to happen as long as the virus problem is not solved. God luck.

With only 1b capacity, Rubberex results don't quite make sense. I'll be more circumspect. Something is cooking.

I sure hope the price will crash below 2.48 to close the gap. For those gloom & bust fellows, please sell off all your Comfort shares to crash the price. But for those who are stuck and have the convictions that better days are ahead, you should hold on to your shares. It really doesn't take a genius to understand that demands for glove far outweighed the supplies as Uncle KYY postulates. It is so clear that all the glove counters are going through a consolidation stage. Those who don't understand this really should have no business risking your hard-earned money in this very volatile market. I hope prices for glove shares will go down further so that stochastic for all counters will touch below 20. For those genuine traders of Comfort stocks, the upside is near. Comfort will easily surpass Rm5. Remember, glove counters are one of the very few recession-proof and virus-proof business there is in the next little while. Once the narrative is refocused on COVID and gloves, the upward trajectory of glove counters will again be the talk of the town - vaccine or no vaccine.

3.80 senang sahaja

If you observe intently, it is the big players who are accumulating. Those who bought before May 22 are the ones selling to them. It would be good for the price to drop to 2.48 to close the gap. The stock is oversold with Stochastic at below 20. It's time to buy, not sell.

In stock trading, if you are 2 dimensional like ants, sooner or later, you’ll be eaten by sharks. You have to pull back a little and see the forest, not just the tree. Forget about uncle or any other persons. You ought to be able to think independently. If you can’t think, you have no business in this volatile market. Here’s my take for you to consider.
On the technical aspect, more than 1.2b shares had already changed hands since Jun 3. That means only those who bought before May 28 can still sell for a profit. Those who bought later will have to sell at a loss. Those who bought before May 28 would have missed their boat if they have not sold. They are unlikely to want to do it now. Like any typical human, they will want to wait for the next price surge.
Now if you look at the chart closely, you find that a pennant (not triangle) is forming. The pennant is a bullish continuation in this case. This makes a lot of sense. Those market makers who had sold at great profits on Jun 1 through Jun 5 no longer have any shares. They need to reload. This is called an accumulation phase. Take a close look at the volume, you’ll find that volume have decline substantially from Jun 9. This is consistent with accumulation phase. Once the Market Makers have accumulated enough shares, the show will begin. We ikan bilis can’t do anything without the Market Makers (some may call them sharks). But they are good for the stock market. Without them there would be volatilities. It is volatilities in the market that make money for you.
To look at the forest - glove counters are the only companies that are virus-proof and recession-proof. Forget about vaccine and the hype of panacea, gloves as PPE will continue to be in high demand worldwide. The virus infection is on the rise worldwide – not dwindling. The US will have more infections, not less. So, the better days are still ahead of glove companies.
If you have no stomach for volatiles, I suggest you go and sell nasi lemak. Such business is a lot more stable, despite the virus.

The ebb and flow of share prices are normal. Just watch. I won't be surprised to see it limit-up today. Just wait for sentiments to brew stronger.

Just wait. I will not be surprised if the share closes limit-up today. A strong tailwind is on Careplus, being the lowest glove counter with 4.1b capacity.

There is no such thing as fair value. Everything in this stupid market is stupidity. And stupidity means sentiments. Careplus may go up to Rm3+. Just wait for the mad rush of sentiments.

Today may close limit-up.

Hello. Glove counters are virus proof and recession proof. Yesterday sell-down because of the fear for the 2nd wave is good for glove counters. Just use your brain.

Infrastructure stocks will be one of the best defensive game in a besieged equity market. Oil & gas is tanking. Technology is in a tailspin. With Gobind restructuring telecommunication, the stock prices of the industry players are yet to see the bottom. Economy everywhere is softening. To jumpstart, governments usually spend on infrastructure. The funds must invest their money. They can't just keep cash. That makes Gamuda a gem to behold. To begin with the share price of Gamuda has already been pummeled. All the bad news are already disseminated. That makes Gamuda seriously undervalued. Gamuda is virtually shielded from the Sino-US trade war. Just observing the trade movements of Gamuda share prices lately convinced me that funds are already quietly collecting Gamuda shares. It'll soon be a deluge.

Within 2 minutes of opening, sellers were in control and began to sell down from the high of 3.15. This means, at this point in time, the market is not firmly convinced that the deal offered by Haitian will pan out, otherwise the price would be hovering at the 3.30 range. I believe, this is because the time frame for the takeover bid is just too long. Just the preconditions alone may take up to 6 months. This is also a very volatile time around the world. There are just too many uncertainties. Despite of all that, I believe that the fundamentals favor Unisem even without the takeover bid by Haitian. If it does not dissipate over the next couple of months, I believe that takeover bid offers a floor for Unisem's stock price to firm up. If the next two quarterly results (Nov and Feb) hold up, I believe, the stock price will rise north of 3.30 based on fundamental alone. Should the Huatian bid pan out, they will have to up their offer price well above 3.30. This is still early days for the play of the Huatian takeover bid. As for the question whether Unisem is a good investment, the player should instead question his/her stock market knowledge. There is simply no free lunch in stock market.

Could this sell down just be a knee jerk, reflexive reaction to the potential China-USA trade war? This is certainly a great opportunity to buy Unisem at great discount. Let's put aside the fear factor, and rationally consider based on market knowledge and logic. In so far as what we know now, the US tariff is against China's electronic etc. That means, the US hi tech companies will have to source the supplies from elsewhere. Guess what? Malaysia is not in the equation. Naturally, Unisem and other tech companies will get more business as a result. (Assuming Unisem Chengdu factory will hold its ground.) I believe, the smart money knows this. It just needs a few weeks or less for the market to digest. Notice the smart money is tricking others to sell the shares to them by having very low queue quantities and then keep topping up slowly whenever sellers are still willing to sell to them. The next consideration is a long term one. Demand for chips will not decrease but will continue to grow. They are no longer used just for computers and smartphone. They are used for everything conceivable. Unisem is run by owners who have extremely high stake in the company. They will protect their interests by making the company as profitable as possible. This is just food for thought. (As for me I am looking forward to Unisem climbing back to Rm4 range in a not too distant future.)

"Stock: [HENGYUAN]: HENGYUAN REFINING CO BHD

Mar 5, 2018 10:17 AM |

Here are some of the concrete realities facing the market. The Ringgit is strengthening against the USD. The trade war is looming. The price of crude is plateauing. Margin squeeze is happening. Refinery business should be more of a utility investment, which means, investors expect healthy dividends. Yet China controlled companies are not in the habit of paying out dividend. And look at the euphoria of the Dec rally that saw Hengyuan price shot up like a rocket. Any chart reader will tell you the price surge was not sustainable. So how are these factors affecting Hengyuan and Petronm stock price? You want to play the stock market, analyze these reality and then make you own decision. Good luck."

YOU HAD BEEN WARNED ON MAR 5, 2018 POST. BUT FEW HEED THE FACTS!!!!

Here are some of the concrete realities facing the market. The Ringgit is strengthening against the USD. The trade war is looming. The price of crude is plateauing. Margin squeeze is happening. Refinery business should be more of a utility investment, which means, investors expect healthy dividends. Yet China controlled companies are not in the habit of paying out dividend. And look at the euphoria of the Dec rally that saw Hengyuan price shot up like a rocket. Any chart reader will tell you the price surge was not sustainable. So how are these factors affecting Hengyuan and Petronm stock price? You want to play the stock market, analyze these reality and then make you own decision. Good luck.

Hi guys, today is the day - EGM. You want a healthy stock price bounce, go and VOTE to deny PNB the exemption and force PNB to take the company private. Investor12345 is right, if rights Issue is to take place, the dilution will be extreme. You can forget about the price bounce for a long time to come. You'll be stuck with your UMWOG position. Again, don't believe the ruse that UMWOG will go belly up without the cash injection from the rights issue. It will survive alright.

Don't fall for the ruse that UMWOG will go belly up if the rights issue fails. If you owe the banks 1.5 b, it is as much their problem as it is yours. In the short run, I believe, UMWOG will just roll over their debts. With regard to price: Should the rights issue exercise be rescinded, I believe, the smart money will scoop up the shares while the retail players panic. In the short term, price may fall, but not by much, and it will be only for a short time. I believe, PNB will have to act fairly soon - within a month or so. If PNB announces a buyout, it does not mean that we must sell our shares to PNB at whatever price it asks for. There are convention and rules to follow. An independent advisor will also be appointed to arbitrage a fair price. The norm is close to book value, which is about 1.05. But it can be less. But no way will PNB get away with even 30 sen offer price. But make your own call. Rights issue is really bad for all - minority, PNB and UMWOG. I have stated most of the reasons. Please read backward. After that if you still insist on voting for the rights issue, please go ahead. If you had bought at 4.60 or even 3, it is best that you take your shares private with PNB. But do vote against the exemption.

Bingo, Rowie. You got it. Remember to vote.

Let's be clear. At the moment, there is no such thing as PNB taking UMWOG private. Until and unless we as shareholders vote out the Rights Issue thingy at the EGM, PNB does not have an excuse to take UMWOG private, even if it wants to. In my opinion, taking UMWOG private is the best course of action for the minority, for PNB and for UMWOG as a going concern. It is win-win for all. But it will not happen unless the market forces PNB to go this route. Guess, it is just how things work.
10/08/2017 11:44

I actually wanted to ignore oasischeah's comment,"Selling off now is better than waiting for rights issue." It's none of my concern. I am only here to urge you to vote. But my conscience prick me to share the little facts I gleaned from my research on this counter. Hopefully, should the price take off, someone won't sigh, "So near yet so far." But the decision is still yours to sell, hold, or even buy. Here goes: There were 1.2 b shares distributed from UMWH when it divested its holding of UMWOG on Jul 11, of which 0.9 b shares went to the triumvirs (PNB, EPF and KWP). Only about 0.3 b went to the minority. With more than 0.6 b already changed hand since, who else are there who can afford to sell below 30 sens? So if you analyse the volume, you will have to come to the same conclusion that there aren't much more to sell down. I hope you can make a few bucks out of this. VOTE.

Sign a proxy to a friend who plans to attend the EGM.

By convention, announcement of Important Dates comes a month or more after the EGM. While the decision to buy or sell varies among investors, my view is at this rock bottom price, UMWOG is a value buy. Remember, even bonds of insolvent companies or states are still sought after by vulture funds. Value is all about price. Do make your own decisions. The only reason I am in this forum is to urge all of you to go to the EGM. Disseminate this to all your friends who own this stock. For those who buy at this price can look forward to making a hefty profit should PNB take UMWOG private. For this to happen, PNB needs a little helping hand from us.

Don't be too sure that they have done their "homework" or ICON fiasco wouldn't have happened. If you still own UMWOG stocks, I urge you all to go to the EGM and vote against exemption. I suspect PNB will quietly appreciate it. Unless the Rights Issue is voted out, PNB may not have the smoking gun to take UMWOG private as a last resort - just like Malaysian Airlines case. The only minority shareholdings the management could conspire with to vote for the exemption are those held by EPF and KWP. Both combined only own 16.5%. The balance of the minority can easily out gun the duo with their combined holding of 38.5%. I suspect the market is also gearing up for PNB's buyout of UMWOG. Consider. Who have been buying at below 30 sen? Since the big sell-down began on Jul 13, 600m shares have change hand. That is a good ⅓ of the total outstanding shares. VOTE and see the stock price skyrocketing.

JamesPond, It is clearly stated in the circular. Rights Issue will be scuttled if PNB does not get the exemption. Like Malaysian Airlines, PNB will not let UMWOG go to rot. It stands to lose billions. UMWOG is still a viable business that simply needs nursing. That's all.

The rights issue exercise will be scuttled should minority shareholders disapprove of PNB exemption from MGO. Should this happen, I hope the next course of action will be for PNB to take the company private. PNB has a lot more to lose than us minority.

Please read the circular on exemption. On price, I am optimistic that it will bounce a lot higher.

PNB can vote for rights issue, but cannot vote to exempt itself from undertaking MGO. Not sure which sections of the act. But these rules are widely reported.

Anyone planning to attend EGM on Aug 25?

I expect losses to persist but narrow.

Yes. With PNB's controlling stake, the rights issue resolution will carry the day. But PNB can't vote to exempt itself from undertaking MGO. So if minority shareholders like you vote NOT to give PNB the exemption, PNB may have to undertake the MGO. The share price will get a good bounce. It is tantamount to taking UMWOG private. The minority shareholders are in control in this regard.