Toneefa, you are right . Kossan capacity will be increased by another 2 billions at the end of this year from 32 b to 34 b per year whereas supermx capacity will be increased to 36 billions by the end of this year from 26 billions currently. Based on last qtrly briefing , supermx capacity was.fully booked until end of this year with contractual agreements and "" locked in "" ASPs with.final.customers.



------------------------------------------------------------
Good you reminded us pjseow. Supermax end of 2021 will overtake Kossan alrdy and then overtake another time by end 2022. End 2021, capacity will increase by 38% from 26b to 36b. If ASP can maintain thru to 2022 then revenue should increase by 38%.

Kossan capacity will.be increased to 42 billions from.current 32 billion per annum by end of 2022 . Supermx capacity will be increased to 36 billions per annum by end of this year and 48 billions by end of 2022 from the current 26 billions per annum. That means supermx will surpass Kossan in terms of capacity by end of 2022 besides having another source of income from the supermx distribution business.
------------------------------------------------
https://www.thestar.com.my/business/business-news/2021/07/29/capacity-growth-augurs-well-for-glove-maker-kossan

Billboard, if you dont like to read the comments in i3, you can request the i3 admin to remove your post .

hng33, based on supermx briefing slides dated 9 Aug 2020, the distribution profit was only 30 % of its total profit. Only in.last QR, supermx reported its distribution profit was 35 % of total profits. May I know where is your source of information that it was 70 %. Supermx extraordinary revenues ,margins and profits came from change of business model as described in.my earlier message instead of selling higher ASPs than other competitors.

hng33 , you just treat supermx.distributors like Grab Food Delivery. Only when customers place orders from.Grab food., then Grab will place an order from the Food sellers. Grab Food wont stockpiles any food .

hng33, supermx distributors sign contractual agreements with customers with ASP and volumes ahead of production. The.factory will produce based on orders qty and contractual.delivery lead times from.customers. The questions of stockpiles should not arise.

hng33, you can.find such changes in 2020 End June Quarterly Report .

hng33, Supermx started its change of business model in March 2020 by eliminating middlemen like dealers , agents , brokers and sell direct to final customers. The acute shortages had enabled supermx to do the above and also reduce the.OEM % from 30 to 2 and also increase the sales through its own distribution channels from 40 to 58 %. These were the changes which enabled.supermx to deliver.higher revenues , profit.margins and earnings for the last one year. This change was real, solid and tangible changes . By how much supermx distributors need to.adjust the ASP.depends on the markets which.comprises many other independent distributors. In my opinion, supermx distributors will not invite the middlemen to come.back.and.share their margins after post pandemics. Once supermx had built up the relationships and channels , there is no reason for supermx to bring back these middlemen.

https://finance.yahoo.com/news/delta-variant-changed-everything-for-americas-re-opening-doctor-says-183008646.html

Sunyata, I did not have any calculation on Fair value but I had done a worst case scenario calculation by assuming ASP go down to US 24 per 1000 and mfg net margin of 10 % and distribution.margin of 15 %. The other assumption .is capacity goes uo to 48 billion per year during post pandemic which may happen in 2003 or 2004 . Pls read my previous messages .


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Sunyata Pjseow, how much fair value according to your calculations
28/07/2021 3:41 PM

It has been almost 10 months since all the glove stock prices had been.coming down due to the imaginery.fears of ASP coming down while all the glove makers are making record profits qtrs after qtrs except topglove.which was affected mainly due to CBP.ban . While.nobody knows when the pandemic will end and when will the ASP comes to stabilised state and by how much but the markets had already over reacted as though the ASP had already come down to stabilised state. All the glove makers are having the lowest PEs of less than 4 except Harta with less than 9 . Never in.history had a sector.which keep making record profits while stock.prices keep coming down with Average PE s of less than 4. With the expected good QR for Harta , Supermx , Rubberex, Careplus , the average.PE will come down further to below 3 . The M alaysian markets had gone crazy.

With another record profits from Kossan , it looks like the 60 % production implemented in.June MCO was mitigated by higher ASP .
I expect Harta and Supermx to.also deliver their more than 1 b profits in the coming QR announcement barring any.unforseen impacts like container shortage or shutdown.

Kossan made record profits for both yoy and qoq attributed to higher ASP.

https://www.klsescreener.com/v2/news/view/85985

Toneefa, haha. see tomorrow whether he still.dare to post similar repeated messages. I even.handicap him with 250 millions making the bet if supermx make less than rm 750 million he win but if the profit is more than 750 million , then I win. He refused to bet with me.
Remind him.tomorrow if he still post.

--------------------------------------
ToneeFa Actually pjseow, MM did bet with me to chop his kuku if Supermax net profit >RM 500 mil. If net profit is =<500mil then I will chop my kuku. If I lose he will call me Ms Tonee Braxton , but if he loses then he will change his ID to MommyHomeMakers and he shall address me as Sir Toneefa.
27/07/2021 8:46 PM

Money makers, by now you should know Kossan made another record profit of 1.07 billions with record revenue of 2.24 billions. ASP dropping? Profit drop to 500 millions ? Luckily you chickened out and did not bet with me and Toneefa on supermx which.is expected to deliver similar result as last qtr.

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MoneyMakers 8 days left until coming QR massacre..soo exciting! Waterfall is near

Drop 4-5sen everyday down to 3.0..then QR out - another 15% drop to 2.5
27/07/2021 5:08 PM

After almost 10 days of rebound, citadel and money re appeared when there is a big correction today.

Syed Saddiq was talking.nonsense. The contract
doctors issue started years ago . Such policy.by the government is.discrimatory and had nothing to do with money. Why only doctors had such discrimatory policy but not other government posts ? The contract.doctors are not happy with the two years contract extensions because the fundamental discrimatory problems are not solved . He is just too naive to propose windfall tax as a mean to solve a fundamental discrimatory problem.

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

mf KUALA LUMPUR: A windfall tax should be imposed on companies that made profit due to the Covid-19 pandemic and the money should be used to improve the welfare of contract doctors, says Muar MP Syed Saddiq Syed Abdul Rahman.

“The government shouldn’t be afraid to impose a windfall tax on large companies that profited from the pandemic such as glove companies,” he said in Parliament on Monday (July 26)

Take good care . 不要钱在银行，人在天堂。

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Start_0f_the_bull Definitely Benho, I don't want to die while my money earned from gloves remains in the bank.
23/07/2021 10:47 PM

Total accumulated infected 980k , almost a million. Selangor plus.KL alone touching 10 k today. This Delta variants are really scary. Take good care of yourself . Get vaccinated ASAP .

Aiyo, today 15573 cases . Another new record.

Mayo Clinics : Delta variants infections will.surge.for months to come in.US.
----------------------------------------------------------
https://thehill.com/changing-america/well-being/564214-mayo-clinic-expert-warns-delta-variant-will-infect-everyone-who

Despite Supermx has been making 35 % of its total profits from the OBM Own Distribution Channel in last few qtrs, none of the IB pay attention to this earning which differentiate from other glove makers . Below are the numbers which I derived from last qtr earnings.I managed to " peel the onion" by stratifying the respective earnings , margins and ASPs .
Now , I would like to give another "" worst case scenario"" for both mfg earning and distribution earnings during post pandemuc.

1. Mfg Earning

24 x 48 x 0.8 x4.2 x 0.1 = RM 387 millions
j
2. Distribution Earning

60 x 48 x 0.8 x 4.2 x 0.4 x 0.15 = 581 millions

3. Total earnings = 387 + 581 = 968 millions

4. EPS = 968/2720 = 36 sen

If you assign a PE of 18, its value will be rm 6.48 .

Note . I did not add the rm 1.00 per share of the high cash pile plus the extra ordinary earnings in the next 2 to 3 years.


-------------------------
Summary

1. Supermx mfg blended ASP was US 70.2 per 1000
2. Supermx Distribution ASP was US 99.7 per 1000
3. Supermx Distributoion marked up was 99.7/70.2 =1.42 or 42 % marked up
4. Supermx Mfg profit margin was 45 %
5. Supermx Distribution margin was 29.5 %
6. Supermx overall profit margin was 55 %

Yes, by looking at the speed at which Delta and Lamda Variants transmitted and the low rates of vaccinations in majority of countries. The reluctance to have full.lockdown due to economic and employment reasons will.further excercebate the problems.
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Benhobenhobenho @pjseow, u mean to say the worst have yet to come
21/07/2021 4:21 PM

Today, the world 's fully vaccinated with 2 doses are only 13.1 % of the world population. Although last year July, nobody was vaccinated, it did not has the super.transmissive and deadly Delta and Lamda variants then .The 87 % of population are still at risk of getting infected with these new variants . The vaccination rates are just too slow. The.selfish US is even.considering the third shots to improve immunity further. This will deprive the unvaccinated peoples further from getting the.first dose.

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Benhobenhobenho This year is not any better than last year in terms of covid cases increase n deaths.
21/07/2021 4:00 PM

nuilam hali The world is in the early stages of another wave of Covid-19 infections and death, World Health Organization Director-General Tedros Adhanom Ghebreyesus said Wednesday.
21/07/2021 4:03 PM

ToneeFa Actually, I foresee this year cases will substantially exceed last year cases, with more death too.
21/07/2021 4:03 PM

The glove business does not cause.suffering and deaths. Gloves act as protections against virus and bacterias unlike Gambling, Alcoholic and Cigarettes businesses which bring harms to body and families. If you stop the glove or other PPE businesses , more peoples will.suffer and die because of no protections. Please see the difference.

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tehka although up make money, but not very good money because this money is made from people suffer and die.
21/07/2021 2:44 PM

Toneefa, kyy may start buying.supermx again. haha.
----------------------------------------
So it takes DJ drop to wake KYY up. Had he read our postings here he would have woke up much earlier.
20/07/2021 9:28 PM

https://www.aljazeera.com/economy/2021/7/19/covid-variant-fears-spook-traders-sending-stocks-lower

Roadmillionaires, The last qtr comprises April, May and June . I presumed April.and May were running full.production.without disruption. Only in June the MCO was implemented with 60 % production. Net net the full qtr utilization is abour 80 %.
The total shutdown was during.July EMCO which will affect subsequent qtr ( July to Sept).

------------------------------
roadtomillionaires @pjseow thanks for the clarification. Meaning to say the 2 weeks shutdown wont make a big impact as expected on their financial

The Delta Variants are shaking up the stock market. Infected cases were up 34 % worldwide.
--------------------------------------------
https://www.barrons.com/articles/delta-variant-coronavirus-stock-market-51626698932

Myinvestor, I also noticed.the weakening of our ringgit since the beginning of the year. I projected our ringgit will be weakened to 4.4 . This will help all the exporting stocks. On.the contrary the Chinese Yuan is expected to appreciate against the US Dollar . This will make the glove cost of Chinese glove makers higher beside their inherent higher natural gas cost . Natural gas make up 15 % of glove total cost.

https://www.thesundaily.my/local/surge-in-rubber-glove-demand-to-lift-2021-rubber-products-export-CJ8083747

Observatory, I am also surprised why your messages were.deleted. We had been.debating.on a few topics in the last.few months and appreciate your inputs on my comments. This morning I.found a few of your messages were deleted. Like what Toneefa stated, it is i3 administrator prerogative on.what is suitable and what is not . I.still.welcome your inputs on.my comments.

The big question in every glove investors' mind is whether the covid 19 pandemic will really drive gloves long term demand ? To answer this question , we need to ask what drive glove demands and growth rates of t 8 to 10 % in the past 20 to 30 years .
It was the emergence of HIV ,Sars , H1N1, Ebola , Nipah, Zika, Merz and bird flu viruses and outbreaks which spurred greater hygienic awareness that drive the demands and growth for gloves in developed and semi developed countries in the past 20 to 30 years .
The per capita usage of gloves in US and Europe is between 250 to 300 pcs per year today while the usage is less than 50 in developing countries .
THe question is " Will the developing countries per capita usage catch up with the developed countries like US and Europe ?

I am an optimist and my answer is a BIG YES . Why ?

If you take TV , Refrigerator , car and handphone possessions per capita as a guide , then the glove usage per capita will follow the same way .
In 20 to 30 years ago when owning a handset is a luxury or a wants , you will never imagine that almost every adult has a handset today . This includes very poor countries like Bangladesh , India, Indonesia ,Vietnam plus countries in Latin American and Africa. This is a new normal .
The covid 19 pandemic is so widespread in the world that it creates a new normal . In the last few months , I see tellers and cashiers in AIA, Astro , banks and bill payments counters like PBA, Tenaga are using gloves which is a new normal nowadays .

I strongly believe the per capita usage of gloves in the highly populated countries will grow drastically and be on par with developed countries in the next few years . The world has about 8 billion population . If the world average usage is just 100 per capita per year , then the world demand will be 800 billion pcs . Our total glove mfg capacity is about 400 billions today . Assuming the capacity grows at 15 % per year , it will double to 800 billions per year in 2026.
Based on my more than 30 years of high volume semiconductors experience , adding capacities during periods of high demand is as common as buying new car every 5 years . Do you see oversupply of semiconductors today ?
In my opinion , the fear of over capacity is unfounded as equipments can be turned off or just shut off as you wish if there is an oversupply. You do not need to waste labour , raw materials , electricity or natural gas etc unlike perishable foods like tomato, durians , soya beans , palm oils where you cant turn off the " taps ".
Based on per capita usage of gloves in various countries , the room for growth is still very big ( 12 to 15 % post pandemic ,Margma report) unlike food stuffs where the population growth is only 1.1 % .
If you dare to invest in oil palm plantation counters where risk of oversupply is even higher , there is no reason for glove investors to be worry of oversupply where the growth rate is double digits .

This is my 2 cts opinion.

Tussles between new variants with vaccines.
-----------------------------------------
https://www.theatlantic.com/health/archive/2021/07/3-principles-now-define-pandemic/619336/

Today 's flu is a product of 100 years of mutations after billions had been. infected and 50 to 100 millions died of flu infections over the past decades. Till today, ten of thousands will.still.die of flu infections every year although the death rates are so.small .If I ask you whether you are afraid of getting infected with HIV . You.would probably.say YES although today 's.HIV is.much more milder after 40 years of mutations and it is treatable with a series of Antiviral drugs. Twenty years.ago ,HIV was still a scary.virus . Most HIV.carriers would have developed into.AIDS within.10 years. Today many HIV patients can live until 60 or 70 years old with treatments but the patients may look.10 years older than their age . It is still a scary disease.
When.will covid 19 mutate to.a milder and milder viruses ? May be another.decade or longer. We have no.choice but to depend on better and better vaccines . It may take.another few decades to mutate.into milder.flu.like virus when we do not feel.a need to get.a flu.shot like today. Meanwhile, prevention and vaccinations are necessary .

EPF was lending KOSSAN shares for RSS since mid June .

--------------------------------
https://www.theedgemarkets.com/article/epf-has-lent-out-kossan-rubber-shares-regulated-short-selling-midjune

Toneefa, haha, sound like it. He may have taken.some inputs from us. His focus on

1. Glove makers are still very profitable even.at
"" Worst case.scenario ""using US 25 per 1000
2. Glove Companies high nett Cash especially
supermx with 36.6 % market cap.
3. Glove companies still making record profits
4. The coming Delta Variants will continue to 一
drive demands for gloves.
5. Glove counters are undervalued

are what we had been advocating. I would like to thank him for summarising our thoughts in a nice write up.
-----------------------------------------
Haha this Ng guy must have read our postings here and got convinced with pjseow calculations , then bought into glove counters and promote with a nice write up. Kudos to him. We need more media analyst like him.
17/07/2021 11:23 AM

roadtomillionaires, the current supermx capacity is 26 billion per year or 6.5 billion per qtr . Previous qtr ( Jan to March), supermx shipped 5.4 billions pcs which was 80 % utilization. I presumed the last qtr ( April to June) shipment will be about the same or slightly higher due to June MCO with 60% workforce allowed. I understand currently supermx is still.operating.at 60 % with the lifting.of EMCO yesterday besides last 2 weeks shutdown .
---------------------------------------------
roadtomillionaires @pjseow hey mate, do you know what's the current production rate for Supermax during this MCO 3.0?
17/07/2021 11:15 AM

Since the covid 19 virus started its infections 1.5 years ago , its has mutated from Alpha, Beta , Gamma to Delta and Lamda. On average the covid 19 mutated to a new variant within 3 to 4 months. We will.not be surprised more ferocious new variants Theta or Omega will emerge in the next one or two months. Keep yourself vaccinated ASAP . Take good care of yourself and family.


///////////////////////////////7
ToneeFa If you read between the lines, Pfizer has been treating this 3rd booster with some urgency, and I don't think its just about money. I think they could see that the efficacy is waning fast against newer variants each time, so they are preparing for the eventuality of the emergence of the next variant. Their fear maybe the new variant may appear earlier than expected and that those fully vaccinated may even succumb to serious disease and die. That would look bad on them if they do not take any premeditated actions. Now that they have officially rejected, so no one should blame them later. Still, they will worry about the potential negative perception of their brand later. They said they are expediting the research into a new booster jab that is specific to target Delta variant.
16/07/2021 11:21 AM

Delta variants could significantly hit growth In SEA。
---------------------------
https://www.cnbc.com/2021/07/16/covid-goldman-cuts-southeast-asia-gdp-forecasts-as-delta-variant-spreads.html

https://www.bangkokpost.com/opinion/opinion/2148883/delta-curbs-cloud-european-recovery-outlook

Shorties are scrambling to cover their shorts .

Selangor alone 6120, N. Sembilan 1603 and KL 1499.

Aiyo, I just read a.short news that today number of cases reached 13, 215 . Scary. Pls take care .

Toneefa , Did you see the third tall and dark green soldier on the way to my house ?

We have been hearing a lot about supermx dual income streams which are manufacturing incomes and distribution incomes . We are more familiar with manufacturing incomes because the rest of the glove makers derive their incomes from manufacturing only.

I would like to do a reverse calculation so that we can estimate what is supermx Distribution ASP , Distribution Revenues , Distribution Profits and Distribution Margin for last qtr .

Supermx last Qtr Revenue was 1.938 billion, Profit was 1.080 billion , PAT margin was 55.7 % while its average ASP was US 87.15 ( Jan 84.6 , Feb 87.65 and March 89.2 ) .
Total shipment last qtr was 1938/87.15/4.1 = 5.42 billion pcs .
Total shipment to supermx own distributor = 5.42 x0.58 = 3.14 billions

Supermx stated that the ratio of last qtr mfg vs distribution profits was 65 : 35 .

That means manufacturing profit was 1080 million x 0.65 =RM 702 million
Since 58 % of gloves were sold to Supermx own Distribution Division and 42 % sold to Independent Distributors , the respective manufacturing profits were RM 407 million and 296 millions respectively.

The revenue for supermx manufacturing was 702 / 0.45 = 1.560 billions assuming mfg profit margin was 45 % ( Harta was 48 % while Kossan was 47 %) .

The mfg blended ASP was 1.560/5.42 /4.1 = US 70.2 per 1000 pcs

Note: Supermx Nitrile vs Latexx Ratio was 76 % : 24 %.

Hence the mfg revenue selling to Independent Distributors was 1560 x 0.42 = 655 millions .

Hence , The revenue for Supermx distribution Division was 1938 -655 millions = 1283 millions .

Distribution ASP = 1283/ 4.1/3.14 = US 99.7 per 1000

The Distribution profit last qtr was 1080x 0.35 = 378 millions

Hence the profit margin for distribution division was 378/1283 = 29.5 %

Total profits for Supermx gloves which sold through Supermx own Distribution Division was RM 407+378 millions = RM 785 millions

Hence nett margin for the 58 % sold direct to customers = 785/1283= 61.2 %.

THe nett nett profit margin = (61.2 x 0.58) + ( 45 x 0.42 ) = 55%

Summary

1. Supermx mfg blended ASP was US 70.2 per 1000
2. Supermx Distribution ASP was US 99.7 per 1000
3. Supermx Distributoion marked up was 99.7/70.2 =1.42 or 42 % marked up
4. Supermx Mfg profit margin was 45 %
5. Supermx Distribution margin was 29.5 %
6. Supermx overall profit margin was 55 %


Disclaimer : THe above calculation is not a buy or sell call . It is not for naysayers but strictly for supermx serious investors . I welcome civilised comments .

The windfall will not necessarily imply special taxes on glove makers only. The pandemics are causing shortages on semicon chips , palm oil and other products also which drive the ASPs higher. Semicon chips and palm oils prices are at record high . Even banks make record profits from moratarium. Assuming you borrow 1 million and 30 years to fully pay up. Now with moratarium of one year, your total loan plus interest of 4 % per annum will end up 1.04 millions one year later. You need more than 30 years to finish your loan or your monthly payment need to be increased slightly so that you can still finish paying your loan.in 30 years. Government should impose windfall tax on.banks which make billions every year.?

Our government had reduced the corporate tax from 28 % in the past to current 25 % so that malaysia remain competitive compared with other countries. If the government feel that the pandemic has impacted the collection.of taxes, it would be better to increase the tax % from 25 to 28 % just for this periods. Otherwise, it will be difficult to come up with guidelines which companies made windfall profits. Many electronic companies like inari , mpi , D &O, Greatech , plantations companies and banks also made record profits last year and possibly this year .These across the board increase in taxes will be fairer and more substantial . The setback will be negative perceptions by foreign funds . More funds might pull out from our already worst stock market in the world.

The government already get windfall taxes from the normal taxes when companies make more profits. Any company which make double , triple or 10 x profits , the government will get.double, triple or 10x more taxes correspondingly . How many windfall taxes the government wants ? How to draw the lines ? Company that make more than 1 billion.per year ? Then.many banks like Maybank , PBB will be subjected to this new additional " windfall " taxes beside the normal 25 % taxes. What message does the government want to send? Malaysia already had 68 % less FDI last year . Does our government want fewer companies to invest in M alaysia ? Will.Jomo.be responsible for lower FDI ?

Toneefa, I bet he will disappear because his number is plucked from the sky. He himself is not confident with his numbers
That s why he was repeating it every few minutes trying to re assure for himself.