Tonee , ya, you can feel the shorties desperation trying to coerce supermx shareholders to part with their tickets. They came in droves this morning like hyena. Messages from.MMM below really show their desperations.


-----------------------------
MoneyMakers Never sell means 100% loss b’coz can never use money
06/09/2021 2:23 PM

MoneyMakers Selling means minimise loss b’coz get cashback
06/09/2021 2:23 PM

FairTalk , based on the balance of 631 millions deposits as at end June , there is still a balance old orders of about 2868 millions with high ASP of above US 80 . There was a drop of 413 millions deposit from 1044 millions in last qtr . I supposed the 1875 million revenue last qtr was mainly from the old orders with spot sales dropped to 5 % . THe 2868 millions old orders can cover the revenue of this qtr 100 % and the balance spill over to next qtr .With the MCO 60 % workforce , we can roughly estimate that the PAT for the coming 2 qtrs will be 1600 millions . The following will be the estimated cash in hand assuming supermx announce another 15 sen each dividend for the next 2 qtrs .


Balance cash as at 30th June 3.78 billions
minus dividends ( total 45 sen) 1.22 billions
minus expenses for capacity exp 0.28 billion
minus deposits 0.63 billiom

add earnings from next 2 qtrs 1.6 billions

Balance cash 3.25 billions

Note : I used a total of 45 sen of dividends by assuming 3 dividends at 15 sen each including the coming dividend which will be paid end of the month . I also assume that the deposits will be zero after supermx deliver all the old orders with deposits . I supposed no more deposits will be collected since the lead time has come down and spot price is lower than contractual prices.
I also assume the average capacity expansion payment of 140 millions per qtr ( 1.39 billions paid over 10 qtrs ) .
There is a possibility that the final dividend ( usually announced in end Oct or early Nov) will be in the form of treasury shares . If this is the case , we can add back 408 billions to the balance cash piles making it to 3.66 billions .

FairTalk , this is the best I can project and estimate .

Many IBs started to project ASPs from the current peak of US 87 to US 48 in 2022 to US 30 in 2023 . Some even predicted US 26 in 2024 . Based on Frost and Sullivan Research , the Nitrile glove ASP s are a Bell curve with the followings .

CY 2019 US 23.1
CY 2020 US 38.0
CY 2021 US 85.1
CY 2022 US 53.5
CY 2023 US 35.1
CY 2024 US 30.5
CY 2025 US 27.2

It is important for us to know what will be the res[ective PATs as the ASP goes down from the current peak to the respective levels .Since different glove makers has different Nitrile to Latex ratio, the blended ASPs ( weighted average ) will be different . A different ASP , Capacities and NET margins will give different Earnings .

Lets look at supermx historical data and then provide a more realistic projections .

FY 2019 ( July 2018 - June 2019 )

Revenue = 1489 millions
PAT = 124 millions
Capacity = 22 billions per year

Nett Margin = 124/1489 = 8.3 %
Blended ASP = 1489/4.1/22/0.85 = US 19.4


FY 2020 ( July 2019 - June 2020 )

Revenue = 2131 millions
PAT - 526 millions
Capacity = 24 billions per year

Nett Margin = 526/2131 = 24.7 %
Blended ASP = 2131/4.2/24/0.85 = 24.9


Based on the above Actual and FACTUAL Data ,Supermx FY 2020 blended ASP was US 24.9 which will give a Net margin of 24.7 % .
With capacity of 24 billions , it generates a PAT of 526 millions
With simple maths , a capacity of 48 billions will generate double the profits to 1052 millions .

If the blended ASP is US 30 , a 20 % higher than US 24.9 , the PAT should be about double if we use the same utilization of 85 % and net margin of 24.7 % . ASP 30 should actually give a higher than 24.7 % margin .

To summarise , all the IBs had too low a valuations for supermx . They underestimated the PAT by either using a much lower Nett margin or much lower capacity or utilization rates . THey also use much lower PEs and did not consider the Super dividends the shareholders will receive during the pandemic periods .

Disclaimer : This write up is not a buy or sell call . It is intended for sharing with serious investors . Civilised comments are welcomed .

In my opinion and based on the my earlier computation of equivalent linear compounded growth rates of 52 % for 6 years , supermx PE should be at least 6 based on FY 2021 EPS of 140 s. If we based on normalised and stabilised ASP of US 30 and its EPS of about 57 sen, a PE of at least 18 por 20 should be given and add another RM1 for the super.dividend receive during the. pandemic period.
Tomorrow, I will show how the IB s had ignored or omitted some key historical facts on net margins when they compute the earnings for FY 23 and FY 24 .

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

In fact pjseow, SpmX share price should be ard 6.00 if not bcos of the shortist who keep pressing down. I mean its not too demanding to expect at least PE4 for such high profita and with the pandemic still ravaging many parts of the world.
05/09/2021 6:36 PM

joyvest , can you explain why glove stocks PE must be less than 3 while other stocks can have PE of 30 to 60 ? Pls back up with your numbers . Otherwise you are just talking nonsense .
--------------------------------------
joyvest Any PE of more than 3 is just a fantasy.Your self deceiving is more than your loss...
05/09/2021 6:52 PM

MMM, Kenanga gave a tgt price of 5.00 without considering the huge total earnings of approximately 9 billions made in. CY 2020, 2021, 2022.and . It is easily worth about 1.50 if we consider 50 % of this 9 billion. Besides , it did not consider the Distribution income also . Lastly., it give only a PE of 9 which is well below 16 which was the historical average during pre pandemic. If all these 3 factors are considered , the tgt price will be well above 5.00.

papasmurf , Sorry , there is a typo error. The
PAT should be 30 x 48 x 0.8 x 0.13 x 4.2 which gives 629 millions

papasmurf, CIMB assumed FY 23 ASP is US 30. They ignored the distribution income . I tried to guess how they got the 22 sen EPS or 622 millions PAT for FY 23. The following assumption will get a very close numbers.

PAT = 26 X 48 X 0.8 X 0.13 X 4.2 = 629 m

The 13 % margin is too low if the ASP used is US 30 based on pre pandemic ASP of 22 which gives about 10 % margin. I think they also intentionally ignored the distribution income .
Note : I also noticed that the other IBs also ignore or omit the Distribution incomes.



--------------------------------
papasmurf @pjseow Thanks for the summary of analyst reports. For CIMB to arrive at EPS of 22 sen post pandemic, what are the assumption? Even at ASP of US22, I find the EPS too low. Did CIMB exclude the capacity expansion to 48bil? Or did they ignore the distribution income?
05/09/2021 10:37 AM

I spent some time studied the Kenanga, RHB and CIMB latest Analysts reports on supermx . Let me summarise their key assumptions and valuations.

1. ASPs for FY 22 , FY 23 and FY 24

Kenanga US 48 US 30
RHB US 41 US 37
CIMB US 47 US 30 US 26

2. PATs for FY 22 FY 23 and FY 24

Kenanga 2025 m 1000 m
EPS 74.5 s 36.8 s

RHB 1576 m 1569 m
EPS 57.9 s 57.7 s

CIMB 1742 m 612 m
EPS 64 s 22 s


3. Valuations , PE Ratio and Tgt prices


Kenanga

It used 9x CY 22 EPS of 55.6 s . THe EPS is derived from the above average of FY 22 EPS of 74.5 s and FY23 of 36.8 s .

Tgt Price = 55.6 x 9 = 5.00


RHB

It did not give a target PE .Based on its tgt price of 3.15 , we can derive the PE as follows

Tgt price = 3.15
EPS of FY 23 = 57.7 s
PE = Tgt price /EPS = 315/57.7 = 5.46

CIMB

It stated using 16X CY22 PE which is glove sector 10 year historical mean .

CY 22 EPS = 43 s or average of 64 s (FY 22 EPS ) and 22 s( FY 23 EPS)

Tgt price should be = 16 x 43 = 6.88 but

Actual Tgt price given is only 3.20

Actual PE used was 7.4 instead of 16 stated . Why ?????


Summary

If you look at the above 3 examples , you wonder how the Analysts come out with tgt prices . One use PE of 5.46x while another use 9x . The best one is claiming to use 16 x but actually use 7.4 .

jgc , I have read the RHB analyst report. The analyst maintained the long term stabilised Blended ASP for supermx as US 37. The EPS obtained is 57.7 sen but he gave a PE Ratio of only 5.46 which is much lower than the historical PE of 15. This is really puzzling.
I do not know why he used such.a low PE in a stabilised state.


---------------
jgc147 RHB Analysis Supermax v mrDIY

Supermax FY Jun21 Jun22 Jun23

Revenue 7164 4485 5366
Profit 3813 1576 1569I

MrDIY FY Dec21 Dec22 Dec23

Revenue 3391 4321 5135
Profit 456 616 717

Supermax Target Price : 3.15
Supermax Valuation : MYR8,568M

MrDIY Target Price : 4.41
MrDIY Valuation : MYR27,677M

WOW!!!!!
03/09/2021 9:43 PM

Stealth, ya. RHB and some other IB s which downgraded supermx s last qtr earnings to 500 millions are still.thinking what to write . They must have read how MMM was bashed in i3 when he quoted rhb 500 mil PAT projection. Whacking MMM.was like whacking rhb and other IBs. They are hiding now.

Adcool, haha, I agree with you. These IBs must be struggling to juggle with their numbers after the ""surprised PAT "" from.last qtr .

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

AdCool No TP or analysts craps except for Kenanga. Previously those IBs already have prepared scripts even before the results was released. Hence they can just do some amendment get it published in a day or two after results. This time, the number they prepared must have not tallied and need to work out the number again after seeing Supermax reporting 959 million profit and not 500 million profit. Now they must be headache on crunching the numbers again.

Myinvestor, I did not consider the contact lens and the facemask PPE business. I remember the Facemask and PPE business did contribute profits to the company although relatively smaller .

--------------
myinvestor Pjseow, What about non core business contribution to revenue/profit?
Contact lens and PPE/facemask manufacturing in Canada 420m capacity per year.
03/09/2021 10:14 AM

With the Abscence of profit guidance , I can only estimate the next qtr earning using some details from the previous qtr guidance plus details from the last financials .

For those who had looked into the details of prepayment from customers ,you will notice the numbers was reduced from 1044 billion to 631 million , a reduction of 413 millions . With the price came down 15 to 25 % for spot sales and this price is lower than the earlier contractual prices , we can assume that there is no more new deposits from the customers since last qtr . We can only deduce that the last Qtr 1875 million revenue came from the old contractual orders . We can also estimate that the average percentage of deposit is 1875/413 or 22 % of the orders .
That means the balance 631 million prepayment or deposit which is still in the QTR ending June, supermx still has a total order of 631/0.22 or 2.868 billions with the old contracts or lock in ASPs.
This 2.868 billions contractual orders will be sufficient to cover the coming qtr and the balance spill over to the subsequent qtr .

With this fact , I can confidently say that the coming qtr result should be able to deliver similar result if not because of MCO which allowed only 60 % workforce . The effect of 60 % workforce is about 75 % utilization rate based on Harta guidance . The company can actually get more production workers ( 75%) to work while asking the 100 % of office stuff to work from home and still meet the MCO requirements .

The projected revenue and PAT of Q1 2022 will be

Revenue = 80 x 26/4 x 0.75 x 4.2 x 0.5 = 1638 millions

PAT = 1638 x 0.5 = 819 millions

There will be a spillover of 1230 millions ( 2868 -1638 ) order to the subsequent qtr ( Q2 2022) . This Q2 will have a mixture of old order with deposits and new orders without deposits . The projected ASP will average out to be lower than US 80 plus from old orders .THe number will be probably between 70 and 80 .

Assuming an ASP of 75 and no workforce restrictions by then , the revenue and PAT for Q2 will be

Revenue = 75 x 26/4 x 0.9 x 4.2 = 1842 millions

PAT = 1842 x 0.5 = 921 millions .

Note : I am assuming no capacity increase at 26.2 billion p.a and barrig any unforseen circumstances like container shortage or total production shutdown .

Disclaimer : It is not a buy or sell call . My write up is for sharing with serious investors .

It has been a week since Supermx released its FY 2021 Q4 result . Did anybody has Nomura , RHB, AFFIN BANK and BIMB Analyst reports ? THis time I did not see any detailed ASP, Capacity and profit guidance from Analyst report?

Mummymoney makers, You know how to count or not ? Supermx had been giving dividend in the last 4 qtrs of FY 2021.

Q1 . Treasury shares 1 out of 45 worth 20 sen
Q2. Cash of 3.8 sen
Q3. Cash of 13 sen
Q4. Cash of 15 sen

Total 51.8 sen

Dividend yield is 16.4 % at today price.

----------------------------
MoneyMakers Drop 12-3 but total div only 32sen so far..really amazing

Remember some say company cash rich will give crazy 30sen div + treasury shares lol
02/09/2021 4:15 PM

MMM, You lost the bet for last qtr result .and still refuse to admit you were grossly wrong. Do you want to bet for coming qtr result ? You still got the balls to bet .

-----------------------------
MoneyMakers Typical glovers - forever wrong..the day they actually get something right, should make MY public holiday
02/09/2021 3:41 PM

Yes , Supermx had announced a total of 31.8 sen dividend so far. A 3.8 sen interim dividend , one 13 sen special dividend and another 15 sen special dividend . The last final dividend will be announced during end of Oct. The previous year final dividend was announced in OCT 28 2020 with a 1 for 45 treasury shares. Currently , supermx has 103 millions treasury shares. Hope supermx will.also distribute these shares to shareholdets as dividend with one for 27 ratio. This 3.78 % is equivalent to 12 sen at current price.
The total dividend will be 31.8 +12 sen which is 43.8 sen. The total dividend yield will be about
43.8/315 or 13.9 %.


------------------------
myinvestor Investors here mostly + on Supermax good earning at every qtrs. A good dividend (15ct to 20ct) payout for every qtrs. is better 3x better than keeping FD in bank... Price fluctuation will not bother the long term investors.
Shortist investment are usually short term but they go long term bc of failed earning.
Long term means is disadvantage to them as they have to pay high dividend, high interest, high daily transaction fee and this including paying high commission to the Ib remisers (probably 100's) helping them to dump the shares daily.
02/09/2021 11:05 AM

CITADEL was sued by traders.
--------------------
https://fxnewsgroup.com/forex-news/retail-forex/citadel-securities-seeks-to-nix-short-squeeze-conspiracy-allegations/

Tonee, What is really Outrageous is the continued lowest PE bwing given to Supermx compated with the others despite Supermx had made the greatest improvement in PAT CAGR for FY 2020 and FY 2023 with the change in.its business model. It is indeed sinful and obscence for IBs to.still think.that Supermx today is the old supermx before pandemic when it had delivered the best Earning growths among the big4 in the last 6 qtrs consecutively besides its most aggressive capacity.expansions plan of doubling its 2019 capacity within 3 years.

------------------------------------
ToneeFa Yup pjseow, good point. As far as the anal-lease are concerned, they keep estimating base on prepandemic X 2 numbers, despite the fact that by the end of the pandemic will have at least 4 years passed under the bridge without accounting for the PAT CAGR and the many billions profit and cash in hand accumulated.
01/09/2021 3:09 PM

Supermx Uptrend reversal by RHB.
-----------------------
https://www.klsescreener.com/v2/news/view/875579

Stealth, I agree with you. They knew . I.just want to make it more glaring and obvious that the glove stocks are undervalued.

To predict the future , it is good to know the history .
Let me share with you what is the CAGR or compounded Average Growth rate for PATs of the Big 4 glove makers for the 11 years during the pre pandemic period before 2019 . I choose 11 years mainly because 2008 was the year immediately before the H1N1 Epidemic which caused few hundred thousands deaths in US and the rest of the world . The H1N1 Epidemic lasted 18 months from 2009 till mid 2010 .There was also a spike in Glove demands and ASP increase during this period . THereafter , there was a slight drop and then the demands and ASP went up again .

The followings are the PAT CAGRs for the Big 4 from 2008 till 2019 .

Topglove 12 %
Hartalega 19 %
Kossan 14 %
Supermx 7 %

You can see that after the H1N1 was over , there was still growth for all the Big 4 although at a different rates .

Average PE given to the Big 4 in last 5 years

Topglove 25 to 30
Hartalega 30 to 45
Kossan 25 to 30
Supermx 15 to 18


Based on the above data , it appears that there is a correlation between CAGR vs PE given by the markets.

Harta has the highest CAGR and hence the highest PEs
Supermx has the lowest CAGR and hence the lowest PEs

Now look at the current pandemic which started 18 months ago and at the rate the pandemic is going , nobody knows when it will end . As the growth in ASP and capacities are in Bell shape , it is difficult to give a reasonable and logical PEs .
In my previous messages ,I had invented a Hypothetical Linear Growth Rates for Harta, Kossan and Supermx so that there is a comparison with the current Bell Shape growth scenario .
With some comments from the forum , I have adjusted the Stabilised ASP to fall in 2025 instead of 2023 . I have also adjusted the Hypothetical CAGR of ASP to 6 % and capacity increase to 12 % annual growth rate so that both scenario end at the same ASP (US 31 ) and same year . This will give a PAT CAGR of 52 % for Supermx from 2019 to 2025 . Both Scenario will end up with an EPS of 55 sen in 2025 .

Now the interesting questions arise . What should be the PE given to 2025 EPS of 55 sen for supermx?

1. In the first Hypothetical Linear Growth Scenario, the 2025 EPS is the highest for the 6 years from 2019 to 2015 . IT is a beautiful growth story of unpredecented CAGR of 52 % .

2. In the current Bell Curve Scenario , it is a "SAD Story " given by IBs and the naysayers because it is " NEGATIVE GROWTH " since the 2025 PAT and EPS is the lowest from the current peak of 3.8 billions and EPS of 140 sen . If you total up the PATs for the 6 years , the current Bell Curve Scenario has better PAT than the Hypothetical Scenario by 4 billions .

Dont you think it is ironical ? Is it a big joke for our financial analysis community ? Current Scenario make more money becomes a "sad story of NEGATIVE Growth " while the Hypothetical Scenario make less total earnings but is a beautiful story of tremendous growth of 52 % CAGR for 6 years .

Now , what should be the PE assigned for the EPS of 2025 ?

How do you account for the extra difference in Earnings for the 2 scenarios .This is real cash which can be used for Special Dividends and SBB to be given as bonus or any other uses ?

Foreign Investors were Bursa.net buyers again.

-------------------------
https://www.nst.com.my/business/2021/08/722575/foreign-investors-are-bursas-net-buyers-again

This time the shorties kena trapped by supermx intentional delayed announcement of QR . The shorties thought that supermx result must be very bad especially thIs MMM . She and other shorties like GF , IM had been singing this tune for 3 weeks thinking the PAT will be less than 500 M. Now they have to scramble to buy back to cover their shorts. If FF comes in to snap up the highly undervalued big4 , the shorties will pay dearly for their mistakes.

Ryan83, Last Thursday on 24th , there were.also a huge buying in the last 10 mins of the top 4 glove stocks. It could be from.FF or local institutions.
------------------------
Ryan83 Last 15 minutes large buying values for top 4 gloves..... Top Glove,Hartalega and Kossan RM20-26millions..... Supermax RM16millions
30/08/2021 6:09 PM

MMM together with his ASP and earnings jump off the cliff already.
----------------------------
DJoker89 MM Massacre boy
So apa cerita hari ini?

Mouth stuffed with banana can't talk much isit?
Hahahahahahahaha
30/08/2021 7:29 PM

Stealth , My second soldier arrived already .

Mummymoneymakers , You are 92 % off your projection on Supermx earning when you quoted RHB projection of 500 M . No one believe what you say lah.

wbwanabe. Yes I noticed that we had 2 special dividend plus one First Interim dividend for FY 2021. There is still.another Final Dividend to be announced. The last Final Dividend was announced in 28/10/2020.This Final Dividend was in the form of Treasury shares distributed in 1 for 45 shares owned by shareholders
Supermx may distribute the 103 million.shares as Final Dividend like last year but with 1 for 27.
This is equivalent to 12.2 sen.based on current price of 3.22. Supermx may give both Treasury shares and cash as FINAL.DIVIDEND. Lets wait and see.

-------------------------
wbwanabe Do you all notice these 2 quarters, the dividends are called "special dividends"?. I believe there should be a final dividend to be announced either in October or November 2021 based on their history. Total so far is about 22%, hence hopefully we may get some bumper final dividend soon.
30/08/2021 12:16 PM

jgc147 , agreed with you TA analyst is not alone, most of them are the same.
--------------------------
jgc147 PJSeow, you are correct about TA Analyst but unfortunately he is not alone. Many Analyst (CIMB, RHB) randomly change ASP, Capacity, Utilisation Assumptions to arrive at desired Target pricing with no accountability. The movement in TP over the last year is shocking for all glove companies.
It is unfortunate there appears to be no governance and regulation within the banks to control this.
30/08/2021 11:04 AM

This TA IB is very.irresponsible and unprofessional. When he wrote the report more than 3 months ago , he recommended a buy call with TP of 6.07 . That time the stock price is at about 5 . Those who read his report will buy when the price came down to 3 or 4 plus. Now.he asked those who bought after listening to him to sell even though the last QR result was within.his expectation. Just because he downgraded the TP from 6.07 to 2.71 , he asked peoples to cut loss after listening to him buy high and sell low.

TA gave a TP of RM 6.07 in previous qtr . Now downgrade TP to 2.71 . What has changed.that warrant TA to downgrade more than 50 % ? Dont tell me TA do not know ASP will be coming down 3 months ago ? What nonsensical report .
--------------------------------------
https://www.klsescreener.com/v2/news/view/826107

Yes
Fair reporting. No words or phrase like ASP " Falling Off The.Cliff ".and Last leg of rally .
-------------------------------------
myinvestor PETALING JAYA: Supermax Corp Bhd’s net profit for its fourth quarter ended June 30, 2021 more than doubled to RM958.71 million from RM398.83 million in the same quarter of the previous year on the back of strong demand due to the Covid-19 pandemic which saw higher sales from additional production capacity and continued increase in average selling prices (ASP) from March 2020.

On the whole, Supermax expects demand to remain buoyant beyond 2021

Stealth, yes. I was.communicating with Ben on.some remarks made by IBs. We managed to clarify two things. First , there was a wrong assumption that the ASP in the qtr Jan to March started dropping. In fact , it was higher . Second there was over reaction on the 15 to 25 % drop in.ASP as announced by supermx .It was the spit price drop. Many thought that the subsequent qtr earning will be impacted. When.we read through most of the IB.reports , they share the same informations about lock in prices, contractual agreements and subsequent two qtrs would not be significantly impacted.
---------------------------
Stealth Tonee, pjseow, as observed by Ben Tan, in the last briefing by supermx, the management could have been more forthcoming. In fact they sent out the wrong signal. Don't know if it was also the deliberate attempt by some media to cherry pick certain negative developments in the industry
29/08/2021 8:16 PM

Some of you may have misunderstood the real message I want to.convey to supermx investors and the IBs . The stabilised ASP of 30 to 35 may not fall in 2023. It may happen in 2024 or 2025. It doesnt matter whether it falls on.2023 or 2024 .The linear CAGR will.still be higher than during.the pre pandemic periods . If the stabilised ASPs fall in.2024 , then the linear CAGR will be 34 % , 32 % and 66 % for HARTA, KOSSAN and Supermx respectively . My key messages are

1. The whole pandemic periods of 4 to 5 years have higher CAGR than pre pandemic periods. Why.punish stocks with higher CAGR during pandemic with Extremely low PE ? I.intentionally created a.hypothetical Linear growth model.so that the IBs has no EXCUSE to scare off investors by saying that ASP s are coming down, earnings will be back to pre pandemic periods etc so that lower PE will be given . My hypothetical.model.do not have ASP coming down . Only all the way up but with a linear high CAGR which can rival good technology stocks .

2. It is WRONG for IB especially JP Morgan to give a TP which is lower than pre pandemic price when the earnings is 4 X of pre.pandemic earnings even after the ASP has fallen to a stabilised state of US 30 to 35 . For example . JP Morgan gave Harta a TP of 5.30 which is lower than the pre pandemic price although the earning in 2023 will be 4.2 X of 2019 .

3. What about the huge extraordinary cash earn during the pandemic period ? Why.are.these cash not accounted for in their valuations ? For example .Supermx made 4.3 billions in the last 1.5 years. This is more than 2.5 X.what Supermx made for the last.20 years during pre pandemic before 2019. This 4.3 billions is only made during the rising half of the Bell curve. What about the earnings of second half of the descending bell curve ? The IB s completely ignored these Extraordinary earnings .

Disclaimer. This posting is for sharing and not a buy or sell.call .

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

Summary

All the 3 glove glove makers show a double digits annual growth rates of 44 % ,41 % and 88 % for Harta , Kossan and Supermx respectively from 2019 to 2023 assuming a hypothetical Linear growth from 2019 to 2023. Such high growth stocks deserve a much higher PE than the current less than 5 even though the current actual BELL CURVE Growth Rates are even higher than the Hypothetical Linear Growth. Supermx has the highest growth rates among the 3 mainly because of Change of Business model by eliminating middlemen plus more aggressive doubling of capacity from 2019 to 2023. Such growth rates can rival Semiconductors or Technology stocks which the IB gave a much higher PE of between 30 to 60 .
The current actual Bell Curve Growth made additional few billions in the coffer compared with the Hypothetical Linear Growth scenarios . THis is also not accounted for .
Based on the above analysis , the 3 glove stocks are grossly Undervalued .
29/08/2021 12:49 PM

FairTalk, I will compute once I have the Analyst briefing from.supermx management . The.last.supermx briefing was quite good that it provided very.detailed ASP numbers in qtrs ahead. I hope this time they can give similar ASP.details moving forward.

--------------------------------------
FairTalk Mr PJ Seow can we request you to do a computation how much larger will the hoard of cash reserve of Supermx at the end of next year assuming Supermx will continue to give very lucrative high dividend payout just like this year.
The shareholders are getting excited.
29/08/2021 4:24 PM

matyus, 4.2 is the exchange rate between US.dollar and our Ringgit.

Consensus between glove MARGMA , Glove makers and IBs that the ASPs of Nitrile gloves will stabilised between US 30 to 35 post pandemic . Let me show you what is the CAGR for PAT for Harta, Kossan and Supermx respectively ASSUMING a hypothetical LINEAR GROWTH from Calendar year 2019 Pre pandemic to Calendar Year 2023 Post Pandemic .

Harta

2019 total PAT = 410 millions

2023 projected PAT = 33 x 63 x 0.8 x 4.2 x 0.25 = 1.746 billions

Total Growth rate from 2019 to 2023 = 1746/410 = 426 %

CAGR or Compounded Average Growth Rate per year = 44 %

Note :assuming ASP of US 33 ( 100 % Nitrile) , capacity 63 billions, utilization 80 % and net margin of 25 %

KOSSAN

2019 total PAT = 224 millions
2023 projected PAT = 31.7 x 42 x 0.8 x 4.2 x 0.2 = 895 millions

Total Growth rate from 2019 to 2023 = 895/224 = 399 %

CAGR or Compounded Average growth rate per year = 41 %

Note :assuming ASP of 31.7 ( 90% Nitrile and 10 % Latex) , capacity 42 billions ,utilization of 80 % and net margin of 20 %.

Supermx

2019 total PAT = 105 millions
2023 projected manufacturing PAT = 30.8 x 48 x 0.8 x 4.2 x 0.18
= 894 million
Distribution projected PAT = 894 x 0.5 = 447 millions

2023 Total projected PAT = 894 + 447 = 1341 millions
Total Growth rate from 2019 to 2023 = 1277 %

CAGR or Compound Average Growth Rate per year = 88 %

Note : Assuming ASP of US 30.8 ( 83% Nitrile and 17 % Latexx) ,capacity of 48 billions pa ,utilization of 80 % and net margin of 18 %.

Summary

All the 3 glove glove makers show a double digits annual growth rates of 44 % ,41 % and 88 % for Harta , Kossan and Supermx respectively from 2019 to 2023 assuming a hypothetical Linear growth from 2019 to 2023. Such high growth stocks deserve a much higher PE than the current less than 5 even though the current actual BELL CURVE Growth Rates are even higher than the Hypothetical Linear Growth. Supermx has the highest growth rates among the 3 mainly because of Change of Business model by eliminating middlemen plus more aggressive doubling of capacity from 2019 to 2023. Such growth rates can rival Semiconductors or Technology stocks which the IB gave a much higher PE of between 30 to 60 .
The current actual Bell Curve Growth made additional few billions in the coffer compared with the Hypothetical Linear Growth scenarios . THis is also not accounted for .
Based on the above analysis , the 3 glove stocks are grossly Undervalued .

https://www.theedgemarkets.com/article/rubberex-2q-earnings-surge-182-rm65-mil-strong-glove-demand

The Supermx s Prospects section.also.never use the words OFF THE.CLIFF . Why the Star Author invented.such words. He learned from the shorties like MMM who use words like massacre ，bloodshed which sound like end of the world .
The NST report is less sensational and more accurate .

https://www.nst.com.my/business/2021/08/721618/supermaxs-net-profit-surges-rm95871mil-q4-declares-15-sen-dividend%C2%A0

Stealth, haha. you can still remember my 3 green soldiers. The last time they came in mid July . There were the shorter soldiers but still manage to march up to 3.75 . Hope this time the taller Angmo soldiers will come next week . One tall one already here today.

---------------
Stealth Pjseow, hope to see the 3 soldiers again by wednesday,
27/08/2021 4:07 PM

Stealth, this supermoon cakes business make 125 millions in FY2019 , 526 millions in FY 2020 and 3888 millions in FY 2021. It looks like peoples eat more mooncakes during pandemics.

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Stealth Don't invest in mooncake business? This mooncake festival has been goin on for a year now and is still going on for many more moons to come!!
27/08/2021 2:06 PM

-Supermx , Topglove , Harta and Kossan are paying more than 1 b each for FY 21. Total taxes could be more than 6 b . This is.more than 10 x of what these 4 glove makers paid in.FY 2019 pre pandemic. A 10 x windfall for the government . Not enough ?
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Sogbashen A lot of investor saying that there will be tax for gamble like genm. But the chances for gamble tax is so low compare to windfall tax on glove. Glove earn so many, should really pay higher tax while other recovery company the government will help them until they able to operate steadily and normal
27/08/2021 1:19 PM

Glovefinish, Minority shareholders cannot take out money from the company but major share holders can ? Where you get such information ? No one can take out any money for own use. Only through dividend distributions that all share holders are entitled to get money from the company. This include major shareholders like Stanley and other local or foreign institutions.
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glovefinish Remember u are only the minor stock holder not the major one and not the boss just very very little only, what u can influence the company decision making?
27/08/2021 12:49 PM

Glovefinish, It is precisely this type of stupxxd comment from you that tried to bluff and lie to the ignorant investors that cause them to sell at very low prices. Who say a shareholder do not own the cash piles ? Where does the dividend come from ? A share holder own all the assets and liabilities of the company based on.the proportion of shares he or she own . Please dont stood so low to earn your living by giving wrong information to shareholders.n

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Company with huge profit and cash rich, so what? The company cash piles not yours that u can't own and can't spend it. Company cash rich can't stimulate the stock price bcoz it's not the main factor to be considered by most investors and funds who are more concern and focus on its future profit growth and its profit sustainability in future.

Summary.of supermx performance

FY 2021 PAT 3.888 biliion ( YOY 739 %)
FY 2020 PAT 526 million ( YOY 424%)
FY 2019 PAT 124 million

No stock in.KLSE can give.such.fantastic growth rates of consecutive triple digits growth for 2 years.
The Earning yield for FY 2021 is a whopping 48 % based on the price of 3.08. In other words its PE ratio is 2.1. Total dividend for FY 2021 is 31.8 sen which give a Dividend yield of 10.3 % . The company has a Nett cash of 3.5 billions . Font you think the stock is undervalue.

Supermx prospect guidance

Demand continue to increase but global selling price decreasing.
Supermx expect demand.continue to be buoyant beyond 2021.

By the end of 2021 , supermx expect its capacity to increase from.26 billion to 36 billions per year , an increase of 38 %. As long as there is strong demand , the 38 % increase can mitigate the fall in ASP so that the drop in.PAT will be more gradual and not significant.

In the previous QR when supermx mentioned ASP had peaked.and ASP was dropping 20 to 25 % , the IBs misinterpreted that subsequent QR PAT will drop correspondingly without listening to the details. Many had expected last QR profit at 700 to 800 mil. RHB even projected 500 mil which MMM quoted repeatedly. They intentionally omitted " LOCK IN " Contractual ASPs. With the 6 months lead time then , at least two subsequent qtrs PAT will not be significantly affected. Today result had proven the IB s were grossly wrong in their projection. If not because of the 60 % workforce implemention during June MCO , Supermx would have made another record profit of mire than a million