Posted by bang_miskin > 2021-10-10 23:59 | Report Abuse

Thanks for the news observatory,
While ASP is higher than pre-pandemic levels, there's little info about the profit margin. Will it be the same, higher or lower than pre-pandemic levels? Harta financial report over the coming years will give us more clue. I began to think the pricing of Harta is quite fair, because there is still quite a lot of uncertainty with the market/profit margin after the pandemic.

Posted by ThePowerOfGlove > 2021-10-11 00:11 | Report Abuse

cannot so easily go to pre-pandemic level la

Posted by ThePowerOfGlove > 2021-10-11 00:12 | Report Abuse

pandemic still so far from ending leh

Posted by ThePowerOfGlove > 2021-10-11 00:13 | Report Abuse

simply fearmongers making up scary stories

Posted by goody99 > 2021-10-11 09:32 | Report Abuse

I believe we should be able to buy below RM6, so there is no need to buy above RM6. it is definitely possible to buy below RM5, especially if there is over-capacity in the industry.

Posted by bang_miskin > 2021-10-11 09:52 | Report Abuse

Agree with goody99. While I think Harta is worth more than RM6, no point paying more than RM6. Price below RM6 or even RM5 can buy.

This counter is already in my "buy-it-forget-it" section. If you want to buy for quick profit, seek elsewhere.

Posted by rl68 > 2021-10-11 13:28 | Report Abuse

@observatory, Harta's capacity is 63 b in 2021 [ AR 2021,pg34]. By the way, do you know the cost of production nitrile glove of Intco ? Somebody told me that Harta cost is around USD20...

Posted by risekita8 > 2021-10-11 15:42 | Report Abuse

When EPF disposing, it is not good to that counter

That is why i don't like EPF

Posted by bang_miskin > 2021-10-11 16:07 | Report Abuse

Maybank recommends sell for Harta and Kossan (previously Topglove). Bloodbath for these two counters today.

Surprised with Maybank's recommendation since it was considered one of the top buy stocks for 2021. They mentioned that price could fall below pre-pandemic level. I personally don't think it is likely from the news I've heard... but yeah sentiment is from bad to worse.

Posted by observatory > 2021-10-11 16:22 | Report Abuse

@rl68,
Check out Note B3 (page 10) of the latest quarterly report ending 30 Jun (1QFY22). It provides more info. The four plants under NGC 1.5 will add 19b piece per annum capacity. When fully completed, total capacity will reach 63b per annum. Based on prior communication, NGC 1.5 is expected to be fully completed in 2 to 3 year time, meaning 63b is only reached in 2023 or 2024 assuming no change in plan.

As of 30 Jun 2021, the total capacity = 63b – 19b – (2.7b * 8/10) = about 42b. The last part represents the last 2 lines under installation at Plant 7 of NGC 1.0.

Based on 1QFY22 data, given the shipment data (some analysts provided the estimate) one may work out the ASP (= revenue divided by shipment) and unit cost (calculate from margin). My estimate of the unit cost then was about USD25 per 1,000.

Cost is declining now. Raw materials like Acrylonitrile and Butadiene make up about half of the product cost. Some reports say the prices are trending down.

Posted by observatory > 2021-10-11 16:25 | Report Abuse

@rl68,

I don’t know Intco nitrile production cost. I read some Intco investors quoting very low figure but I can’t verify.

A short cut is to compare the quarterly operating margin which will indicate relative competitiveness. You can find that from Yahoo Finance. However, take note that Intco has sizeable PVC glove business whereas Harta is almost pure nitrile.

Posted by Mini2021 > 2021-10-11 17:11 | Report Abuse

EPF sell again....epf helping RSS press the price...

Posted by jolynce > 2021-10-11 17:12 | Report Abuse

Hopefully we are seeing a higher low soon. That will signal a BUY!

Posted by risekita8 > 2021-10-11 20:08 | Report Abuse

For gloves, only TG is green today

Posted by causin > Oct 11, 2021 4:16 PM | Report Abuse

sir come out quickly, waiting for you to fly

Posted by michaelgohmox > 2021-10-11 20:12 | Report Abuse

Everyday talk about short sellers no sian one meh, there must be a reason gloves are being short ? Ever wonder why…… cause the stock price is going south and best to short a weak industry

Posted by rl68 > 2021-10-11 21:12 | Report Abuse

@observatory,thanks. Great insights...

Posted by Loh Kok Wai W > 2021-10-11 21:27 | Report Abuse

glove counter still downtrend....Harta ...below 5.00..

Posted by IdleMoney66 > 2021-10-11 21:55 | Report Abuse

https://klse.i3investor.com/blogs/kltrader/2021-10-11-story-h1592019159-Malaysia_Gloves_Sector_Not_the_Time_for_Bottom_Fishing.jsp

Maybank Kim Eng RSS a lot of glove stocks??? Harta TP at 4.99.....

Posted by bang_miskin > 2021-10-11 22:10 | Report Abuse

....We now value the glove players at -1 standard deviation of historical mean (-0.5 standard deviation before).
____________________________________________________________________
I just don't like the way they fudge the numbers. -1 standard deviation translate to 16 percentile worse case scenario. Why not just cut to the chase, apply 2 percent standard deviation (2.5 percentile worse case scenario) and you can drag the price close to RM2.

The methods used by analyst are fishy at best, devious at worse. With their usual 0.5 standard deviation, their target price above the market price, which is not credible given the current market sentiment on gloves. So they just shift the goalposts to 4.99, it will take awhile, but eventually the price will get there (below RM5).

With their (IMO irresponsible) analyst, they drive Harta and Kossan price down. Mission accomplished?

Posted by bang_miskin > 2021-10-11 22:16 | Report Abuse

Bang_miskin is unhappy with the shifting goalpost by these analysts. About a year ago they gave lofty target price of RM26 for Harta. Now RM4.99. Bang_miskin used to rely on these analyst, but now Bang_miskin would still read their analyst, but with a large spoonful of salt.

Posted by michaelgohmox > 2021-10-11 22:42 | Report Abuse

Gas malaysia hike 20% natural gas

Posted by michaelgohmox > 2021-10-11 22:43 | Report Abuse

GG max

Posted by OO123123 > 2021-10-11 22:48 | Report Abuse

@bang miskin...
....We now value the glove players at -1 standard deviation of historical mean (-0.5 standard deviation before).

is this a standard method... using -1 or -0.5 SD or even how many % SD. Cz this seems quite new to me. Thanks for sharing ya ...

Posted by partimeshark > 2021-10-11 23:23 | Report Abuse

all in harta

Posted by bang_miskin > 2021-10-12 00:00 | Report Abuse

I personally would not go all in Harta. While I think Harta's fair value is above current market price, what if I/we were wrong? Given current sentiment, it is possible to go below RM5. Yes sentiment may improve next year, or it may take much longer, Then what? Keep holding as if you have a long term fixed deposit? Sometimes it is prudent to take a more cautious approach, and diversify into different sector. Don't play the squid game

Posted by observatory > 2021-10-12 01:01 | Report Abuse

I often wonder what does it mean when analysts use standard deviation to determine glove stock TPs.

We learn in statistics that the concept of standard deviation applies to normal distribution curve. When applying to historical forward PE graph, we can imagine a horizontal histogram is superimposed on this graph. The histogram represents the occurrence of each PE value. The assumption is the histogram resembles a normal distribution, which may not hold true.

The 5 year historical forward PE of Harta has two peaks – a smaller peak in early 2016 where PE is almost 40X, and a larger peak in 2018 where PE > 50X.

If an analyst is bullish about the stock. I would rather the analyst say something like “Look. In early 2016 the stock price was almost 40X PE. My TP will be based on the 2016 peak of 40X. While high it’s still below the all time high of 50+ times.” Such explanation is more intuitive.

However analysts prefer to sound sophisticated. They will say the TP is based on +1SD which translates into 40X PE, implying 84 percentile highest in a normal distribution (Note: +1SD is 66%/2 = 34% above mean. So +1SD is 50% + 34% = 84% of the normal distribution).

But there is a bigger conceptual problem, for me at least.

If we look at Harta or any glove stock historical forward PE graph we find that the low PE happens in recent time. Consider the period of late 2020. The forecast EPS for next year then was sky high as analysts expected the sky high ASP to sustain. When the high stock price in late 2020 was divided by an even higher forecasted EPS, the resulting forward PE turned out to be lower than historical mean, and in fact near single digit. The lesson here is during the peak of share price the PE is low (in fact a common feature for cyclical stocks)

Today the analysts have turned pessimistic. They start to apply -1SD forward PE. But – 1SD is near late last year valuation level! In other words, to express a bearish TP the analysts have applied the valuation level during a bullish time!

It's really mind boggling to think about that!

Posted by bang_miskin > 2021-10-12 08:45 | Report Abuse

Thanks for your explanation @observatory, I did not realised their method was that bad. Weeks ago I was puzzled with their low target price for Topglove (~RM1.68). I wonder why they did not a more reliable method, that is not susceptible to cyclical fluctuation.

The main issue here is that most retailers would not give second thought with the analytical flaws and quickly dispose their shares upon hearing the news. Lots of small volume sales yesterday.

Posted by Mini2021 > 2021-10-12 09:09 | Report Abuse

EPF got 8% shares, they can do what ever they like...

Posted by bang_miskin > 2021-10-12 09:12 | Report Abuse

Start the morning red with a refreshing bloodbath.
10 minutes in and oredi -10sen

Posted by Mini2021 > 2021-10-12 09:22 | Report Abuse

The sell Q all is short seller and EPF.......fifo kaki faster cut loss...

Posted by Mini2021 > 2021-10-12 09:25 | Report Abuse

MAybank TP rm 3.99 must die die achieve if not no face to meet people

Posted by bang_miskin > 2021-10-12 09:34 | Report Abuse

Wait Harta TP is RM3.99!? Does that even make any sense? Well done, congrats, the market panicks like no tomorrow!

Posted by Mini2021 > 2021-10-12 09:36 | Report Abuse

EPF got 280,000,000 units shares.....they throw 1,000,000 units the price will drop RM 100-200.....They are very consistently play this game , i like it

Posted by Anxious > 2021-10-12 09:53 | Report Abuse

It's really sad. But what to do. U either get out or just forget about it . I guess for me the last opportunity to exit would have been at RM6.00 but I wasn't willing to stomach so much of losses. So I am now stuck for the long haul. Only option/consideration is at what level to top up as I still believe that this is fundamentally a good company and will weather the storm.

Posted by Ricky Yeo > 2021-10-12 10:03 | Report Abuse

Why is it sad? It should be sad when it was selling at $19. Now is exciting times.

Posted by bang_miskin > 2021-10-12 10:11 | Report Abuse

Anxious if you are investing for long term, average down only when prices reached new lows. For example, you can top up in fixed batches at RM5.5, RM5.0, RM4.5, RM4.0... etc. The amount and increment is up to you, but fair warning, do not go all in into gloves. Your money will get tied up akin to a long term fixed deposit.

Posted by newway > 2021-10-12 10:21 | Report Abuse

Sentiment is very bad. Want to collect also dare not. It is clear that analysts are driving down the sentiment.

Posted by Foreign_Invest > 2021-10-12 10:35 | Report Abuse

have to diversify, don't just watch glove counter. Many chance now except glove counter.

Posted by bang_miskin > 2021-10-12 10:36 | Report Abuse

Given current trend/sentiment, the next QR end of this month may very well be another bloothbath. Good or bad news, price will drop like no tomorrow. Below RM5 a real possibility.

Bang_miskin too optimistic for RM6 this year. Maybe tunggu next year

Posted by bang_miskin > 2021-10-12 10:57 | Report Abuse

Someone purchasing in large quantities

Posted by fortunefire > 2021-10-12 11:07 | Report Abuse

will harta hit below 4 by Dec this year?

Posted by Anxious > 2021-10-12 11:38 | Report Abuse

Thanks Bang Miskin. Initially went I bought Harta, I wasnt planning to keep it for long term. Was only thinking of 1 year or so. Didnt expect the price to crash like this esp with all the rosy picture and TPs painted by investment banks. Now not much choice really.

Posted by stevenckheng > 2021-10-12 11:40 | Report Abuse

in 2 years time we will see few companies same like Harta and Top glove from China and thailand .

Posted by bang_miskin > 2021-10-12 11:59 | Report Abuse

Suprising upward trend in light of morning bloodbath. Someone is quietly mopping up at discounted price.

Posted by Ricky Yeo > 2021-10-12 12:01 | Report Abuse

@Anxious if your initial plan is to buy and sell i.e akin to trading. You're likely to be making a mistake right now to hold it just because the price has come down.

You have to know whether you're investing or trading. Not one is better than the other, but the most dangerous thing is changing your story.

Imagine if tomorrow Harta would go up by 100%, you'll be tempted to change your story again, thinking it will continue to go up etc. If you're trading, stick to it, even if that means selling at a loss.

Posted by Ricky Yeo > 2021-10-12 12:06 | Report Abuse

That aside, if anyone that is investing, too often people get influenced by the share price. If you're buying for the long term aka betting on the fundamental of the business, you should assess the business i.e profit, cash flow, ROC, not where the share price is going. You shouldn't let the price or sentiment affect what you think Harta should be worth.

Posted by vcpmaster123 > 2021-10-12 12:15 | Report Abuse

From technical perspective, harta is the first glove stock to form double bottom pattern...expect harta to trend upwards

Posted by addyloh > 2021-10-12 12:15 | Report Abuse

harta price fluctuate so much today.. low 5.51, high 5.79.. roller coaster

Posted by jolynce > 2021-10-12 12:21 | Report Abuse

Looking good.

Posted by vcpmaster123 > Oct 12, 2021 12:15 PM | Report Abuse

From technical perspective, harta is the first glove stock to form double bottom pattern...expect harta to trend upwards

Posted by bang_miskin > 2021-10-12 12:25 | Report Abuse

Not sure who is buying, but won't be surprised if EPF is mopping up the shares.