Posted by Steventeh99 > 2021-05-16 10:17 | Report Abuse

Stop dreaming. As a listed company. They won't simply come out with these asp statement.

Posted by Airline Bobby > 2021-05-16 11:51 | Report Abuse

Dude. No need to try and shill to people. Cut your losses, glove game is over. Wanna rarn back. Faster go in lctitan befote uncle koon wtite an article bout it!. Done

Posted by gemfinder > 2021-05-16 11:54 | Report Abuse

Scam management ma. Can write story oredi. Last q said the best is yet to come. Now said asp downtrending.

Posted by gemfinder > 2021-05-16 11:55 | Report Abuse

Waterfish lubang, go back to your lobang la

Posted by gemfinder > 2021-05-16 11:56 | Report Abuse

Waterfish fortune, go back to your lobang la

Posted by pjseow > 2021-05-16 13:06 | Report Abuse

Ben Tan, thanks for your article and follow up on supermx after the QR .
There was initial confusion on the ASP drop but when I read the TA, Nomura and Affin Bank Analysts reports , it became clearer that the 15 % to 25 % drop did not affect last qtr result and also the next 3 qtrs .

Nomura report provided the clearest ASP trends . The statement " Blended ASP per 1,000 pcs for Jan/Feb/Mar was USD 84.6 / 87.65/89.2 clearly and obviously showed an uptrend but at a slower rate . The peak would either be in March or April after ASP started to taper off and drop.

With the information of RM 330 m revenue loss due to Meru shutdown , we can derive the ASP for last qtr fairly accurately . If we add back this RM 330 m to last qtr revenue of RM1938 million or RM 1.938 billions , the total revenue would have been RM 2.268 billions. Since we know the capacity of supermx in last qtr was 26/4 or 6.5 million . Assuming utilization of 95 % , Supermx would have shipped 6.175 billions pcs with a revenue of 2.268 billions if there was no meru plant shutdown . THE ASP was calculated to be at US 88.5 assuming exchange rate of 4.15 last qtr .

With the information that the ASP for April /May/June will be in the range of US 80 to 110 , we can take the mean or average which is US 95 which is still higher than last qtr of RM 88.5 . THe average could be lower because there could still be some spot sales in this qtr which is lower at between US 70 and 80 which may pull down the contractual agreement prices which was set earlier but deliver in this qtr .
Since there was information that Supermx had its order booked until end of the year , we can also deduce that the ASPs of 2H of CY 2021 would be in the US 80 plus range with leadtimes still hovering at 6 to 7 months .
I think the Supermx briefing to the anlaysts are sufficiently for us to roughly know what to expect for the earnings of the coming 3 qtrs .
The US 70 to 80 ASPs will hit the revenue and earning for CY 2022 as all new contractual agreements will be negotiated with this new pricings . By then, supermx capacity will grow from 26 billions per year to 36 billions per year .

Posted by DickyMe > 2021-05-16 13:10 | Report Abuse

All these number crunching, curve fitting analysis and connecting the dots will not work in a chaotic, sensitive, and at times irrational, market. The fact is glove is certainly losing it's glamour.

Posted by wbwanabe > 2021-05-16 15:17 | Report Abuse

Thank you Ben. Great analysis as usual! I would rather keep Supermax shares for the next 10 years than gambling on penny stocks or those that doesn't have recovery prospects in the next few years. At least I am assured my capital is still there plus getting consistent dividends that is higher than FD.

Posted by treack > 2021-05-16 16:38 | Report Abuse

Thanks for the great analysis Mr Tan.
My only question here is that if the management came out with a statement that is totally incorrect ( asp dropped between 15-25%), shouldn't it be at least redacted by the management?

Posted by pjseow > 2021-05-16 16:40 | Report Abuse

Dicky , Which statement and analysis are fitting analysis and connecting the dots ?

Statement " Blended ASP in Jan/Feb/March are USD 84.6 / 87.65 / 89.2 " are real numbers provided by Supermx to the Analysts during their briefings .

Statement " Supermx has orders booked until the end of this year with advance payment ( 30 - 50 % of order value in some cases ) collected " is also factual.


Statement " Its contractual orders in hand will help avoid any drastic fall in ASPs for the rest of the year " is also factual .

Also statement like April --June quarter ASP is likely to be in USD 80 - 110 is also real number provided by Supermx .

The above statements are factual not chaotic as described by you .


Chaotic are situations when too many naysayers giving numbers without basis .

Posted by Michael Kwok > 2021-05-16 16:43 | Report Abuse

People talk about future ASP price for glove.Really got drop.Base on futures contract.Total profit did not drop due to the volume profit cover the drops.

Posted by pjseow > 2021-05-16 16:49 | Report Abuse

Ben Tan , Thanks for explaining how the tax credit incentives of US 482 billions will benefit Supermx in longer term . Many investors may not realised such incentives and complained that about the higher cost of manufacturing in US .The value of Customer Intimacy and the proximity of supplier to customer is a plus to customer royalty and ensuring future repeat orders . With such tax incentives , the investment of US 550 is almost " free " .

Posted by FairTalk > 2021-05-17 11:14 | Report Abuse

A very well written and top notch article. All investors and shareholders of Supermx must read. We are very happy with the solid fundamentals of Supermx. At this very difficult economic situation how many counters at Bursa has the enormous cash pile of Billions of RM. Equally very excited with the forthcoming Supermx investment and opening of factories inside USA which is the largest and most lucrative gloves market in the world. Thank you very much Ben.

Posted by Ben Tan > 2021-05-18 13:13 | Report Abuse

Thank you everyone for your comments.

pjseow, my calculations on actual ASPs are very similar to yours. I am a little more conservative and I believe for next quarter blended ASP will be between $85 and $90, i.e. approximately flat q-o-q. With no unforeseen closures, and no unannounced donations, that should result in approximately RM2.3b to RM2.5b revenue from sales for the quarter.

Regarding cost of manufacturing in the US, it is undeniable that the costs will be higher, specifically in terms of labour and potentially in terms of raw materials. The question (and why more clarity on the endeavour is needed) is if the incentives will offset the extra operating costs. Additionally, in terms of logistics, the costs will be lower, which would be beneficial to Supermax's OBM business. Natural gas price in the US is competitive, too.

Posted by frankiecheong > 2021-06-02 21:16 | Report Abuse

GOOD