Notes from M+Online Seminar, 21 July 2018, Penang.
Valuation 1⃣ Analyst upgrades recommendation on CGB to a BUY (from a Hold) with an unchanged target price of MYR0.92 due to minor share price retracement recently.
2⃣ Cautiously optimistic of CGB's earnings growth outlook, which will be driven by ongoing capacity expansion, resilient demand for its specialty rubber gloves and strengthening U.S. Dollars, albeit slightly capped by inflated business costs.(gas tariffs/labor cost)
3⃣ Target price is arrived by ascribing an unchanged target PER of 17.0x to its FY19 EPS of 5.4 sen. The ascribed PER remain at a discount to the PER of industry bellwethers like Hartalega and Top Glove, due to its smaller market capitalisation and capacity.
4⃣ Forward FY19 PER of 15.2x is below the industry PER of 23.0x, indicating positive upside at the current juncture.
Thanks for sharing Yuanlong57, just to add their current utilization capacity is more than 80%. Business deemed good. Now just wait the stocks to break resistance. Soon or later investor will chase again.
TRADING BRIEF - HONG LEONG IB RESEARCH Rubber Products (NEUTRAL)
2H18 Outlook: Lofty valuations to cap upside
1️⃣ An imbalance in supply demand is expected to manifest in 2019 with the glove players expected to increase supply by c.14% (annual global demand growth of 8%-10%).
2️⃣ The RM is expected to be weaker in 2H18 which augurs well for the sector whilst the reversal to the SST regime will yield a neutral effect. We expect the glove players will apply for and receive an exemption for SST.
3️⃣ We maintain our NEUTRAL sector rating. We downgrade Karex to a Sell given the recent share price run.
1️⃣ The Board of Directors, especially MD Cheang Phoy Ken, who are having substantial controlling shares have more to win or lose than anybody else. Hence, it's only imperative to work extra work to protect Comfort interests - meaning theirs and ours.
2️⃣ Unit Trust providers like Eastspring Investment Small Cap and Eastspring Investment Islamic Small Cap, RHB Capital are holding some positions too. The other is KWAP, the Pensioners Fund. These funds have stringent investing policies and they don't invest without due diligence of safety margins.
FOCUS MALAYSIA, JULY 28-AUG 3, 2018 Fastest Growing Companies (Market Cap of Below RM500 million)
Industrial products
Comfort Gloves Bhd comes out tops on Table 2 with a 60% increase in revenue to RM421.2 mil from RM263 mil for FY18 ended Jan 31, 2018. It has a three-year revenue CAGR of 39.5%.
Its net profit rose 38.8% to RM35.9 mil from RM25.9 mil, giving the glove manufacturer a three-year net profit CAGR of 104%.
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yuanlong57
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Posted by yuanlong57 > 2018-07-20 14:22 | Report Abuse
@SuperPanda
Your forecast is quite propitious. Accumulate some @ 0.86.