If you guys do a deep research on UG Healthcare (Malaysia’s company listed in Singapore), you guys will realize that it is quite similar to Malaysia listed Supermax and Top Glove. The reason Supermax and Top Glove up alot since Supermax release their quarter report is because these 2 companies are distributing their own brand of glove which lead to higher profit margin. You guys can understand further from the video as per below link. After watching, you guys can go read UG's report and you guys will realize that UG has their own distribution center at China, Nigeria, UK, German, US and Brazil. Despite UG didnt own 100% of share of these companies, but definitely it helps UG to have better profit. Also, these coutries are badly affected by Covid-19.
Also, not to neglect that Ug Healthcare German is also selling mask, PPE, disinfection, protective clothes etc. All these products are high demand product during this Covid-19. Please refer to the link to understand better.
Besides, UG Healthcare Nigeria is also very interesting distribution center as it is selling the similar products that UG Healthcare German is selling but on top of that, it is also selling infra-red thermometer which is also high demand. Please refer to the link below.
The link below will enable you to understand better about Uniglove UK. Even though it is old news but it definitely will be benefited during this pandemic as it is Europe’s first antimicrobial nitrile glove.
If we do comparison between Rubberex Malaysia and UG Healthcare. UG healthcare is lagging behind. Rubberex market cap = (rm3.56/3.06) * 252195617 = SGD 293,404,051 UG heathcare market cap =（SGD 0.47 * 196092856）= SGD 92,163,642
UG yearly capacity is around 3B where Rubberex only 2B.
So if we use production capacity ratio to market cap as below calculation. UG should worth SGD (293404051 (Rubberex’s market cap) * 3B (UG’s capacity)) / 2b (Rubberex’s market cap) = 214685891
UG’s potential share price = 214685891 / 196092856 (no of UG’s issued share)= SGD 1.09
If we do comparison between Careplus Malaysia and UG Healthcare. UG healthcare is also lagging behind. Careplus market cap = (rm1.40/3.06) * 531,359,799 = SGD 243,105,790 UG heathcare market cap =（SGD 0.47 * 196092856）= SGD 92,163,642
So if we use production capacity ratio to market cap as below calculation. UG should worth SGD (243105790 (careplus’ market cap) * 3B (UG’s capacity)) / 4.1B (careplus’ capacity) = 177882285.4
UG’s potential share price = 177882285.4 / 196092856 (no of UG’s issued share) = SGD 0.907
Even though careplus produce 1B pcs extra compared to UG healthcare, but UG healthcare will benefitted from it’s own brand of glove as well as it’s distribution centers in UK, Brazil and Nigeria are selling others PPE and tools which are badly needed during this pandemic.
If we use the method of one of the Malaysia’s famous investor to calculation the price per glove, UG healthcare is on 0.09 per glove which is much more cheaper compared to peers.
Even though the last quarter report seems like “poor”, but it was mainly affected by the production modification cost where the board has decided to on hold the modification in order to cope with the sudden spike of demand. Do take note that the modification at the end will benefit the group as well. UG has reported positive earning for the last 3 FY. In fact, increase of marketing expenses is good for the company in long run as once everyone know about “Uniglove”, the marketing expenses eventually will come back and profit will go up.
Most likely August report will have flying colour result.
I made comparison between top 4 gloves and 2nd tier glove comfort, carepls and rubberex, the findings was HLT subsidiaries HL Rubber has the lowest production capacity at 1.1b/year annually or 92m/mth.
HL Rubber by the way is 55% owned by HLT not 100%, means they income from subsidiaries will contribute 55% only.
Lets say 1 pcs of HL Rubber glove sell at myr 0.10c, 92m will generate rm9.2m revenue. 55% from 9.2m would be 5.6m.
As we have no data what would be the ASP rise for HL Rubber from Apr-Jun, conservative 20% would made revenue at 6.72m.
If read past qtr rpt, 1/3 revenue is from glove dipping line and 2/3 is from rubber glove, not sure how much sipping line segment will improve but for sure would not able to beat rubber glove.
Hence, based on expectation and current price hike, i have doubt that coming qtr rpt will have significant profit growth compare to the top 4 and 2nd tier gloves producer due to its smaller capacity and 55% owned HL Rubber subsidiaries.
However, this is just my personal opinion, please do your own research to have better picture.
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