This is actually one of the lowest quality analyst reports I have read. There are many problems with it beyond the seemingly random figures for profits they have given, including utilisation rates, exchange rate assumptions, and (what appear to be) ever-rising raw material prices until 2023! Really poor work.
I don't want to call out names (although the name is given in the report). I can only say that this analyst is not a newbie. I have seen reports of his dating back a few years.
I will not argue on the definition of "newbie", but in my humble opinion someone with a few years of experience should not be allowed to make this amount of mistakes (if they were indeed mistakes).
BALANCE_VIEW and gongkia, thank you for your comments.
Unfortunately, it is impossible to know if it was done intentionally. Let's hope that as wkc5657 mentioned above, it might have been an oversight on the supervisor's side to approve the report for publication.
I didn't want to comment on the actual notes from the report, because I hadn't seen the actual report. However, it does seem like JP Morgan have done their best to selectively present only bits and pieces of information that fit their narrative.
Ben Tan , you ate right . Q1 2021 margin is already 50 %. With incressing ASP in Q2 and Q3 , the net margin should be higher than 50%. If the estimated revenue for 2021 is rm.25.6 billion , its net profit should be at least 12.8 billion assuming net margin of 50 %. Its prediction of 7.9 billion net profit is way off.
pjseow and Andre Kua, thank you for your comments.
pjseow, that is indeed the case, and that is what appears to be significantly off with the report of AmInvest. There is no explanation or justification as to why the profit margin is given at 30% instead of 50%. On the contrary, according to the report the profit margins are not expected to suffer (at least for this year).
Andre Kua, supply is expected to be running behind demand at least until year-end 2023, according to reports by Margma. Of course beyond that point there is little visibility. However, setting up of a glove manufacturing facility with a working production chain is a major undertaking, which has proven over the years to not be achievable for everyone. New entrants have significant disadvantages to established players.
Revenue for FY22 (ending August 2022 for Top Glove) is mostly locked in with delivery times stretching 560 days from now for nitrile gloves (the highest revenue segment).
Ben , you know the author, intended assignment, 3 quarters year, entertaining comments most with spent arguments [only Gillian’s comments is relevant to me]. I hope you are not trying to save a flawed report. Really i would ask the author to remove the report, pronto! Cheers stay safe and HAPPY
dusti, thank you once again for your comment. I understand what you mean now. Unfortunately, the report has not been withdrawn, and I doubt it will be withdrawn. Hope is it will get edited soon.
The bigger scam is , shud be by nominated SO CALL 'vaccine developers ' who knows its just glucose liquid in that small cylinders to ask huge block of monies from every countries.
All that monies flushed by G... at their rakyat s expenses.
Anal-ytic article its just the tip of the iceberg lah !
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
supersaiyan3
3,128 posts
Posted by supersaiyan3 > 2021-01-13 10:44 | Report Abuse
You are absolutely right, looking at their working can expose how they try to avoid giving high target price.