Posted by JN88 > 2022-02-10 18:08 | Report Abuse

Guys be careful DNex local institution bought a lot at low price, they are asking people keep buying now.... My estimation if they success to sell all Dnex the institution may be profit between rm 200-300 million.... Ignore the promoter here...

Posted by CharlesT > 2022-02-10 18:10 | Report Abuse

China is the game changer....

Dont play play n dont keep talking abt the past 20 years of good stories in Glove....

Instead better prepare for the coming 10 to 20 years of ghost stories in glove

Posted by observatory > 2022-02-10 18:47 | Report Abuse

@Anxious,

The stock market is a good vehicle to grow wealth for the long term. Over the long run, stock market return > bond market return > cash/FD return.

However, the key is in the long run, preferably over at least one business cycle (5 to 10 years). Another key is stock "market", i.e. a portfolio of stocks, not just a few individual hot stocks.

At the risk of sounding like a broken record, it's crucial to get the mindset and priority right:

1. Set investment objectives - e.g. funding children education; 30 years of retirement in x years with a certain lifestyle; and so on

2. Understand one's risk profile. The profile can change with more understanding through reading, especially reading the stock market history since past patterns keep repeating

3. Set aside emergency fund. Assess the need for insurance

4. Liquid and safe assets (cash, FDs, low risk bond funds) sufficient to cover 3, 5 or 7 years of expenses depending on risk profile (after factoring in other dependable incomes like from stable employment).

5. The remaining in risk assets of varying liquidity, like stocks/ equity, property, and even low correlation assets like precious metals.

But for step 4 and 5, some financial planners advocate risk assets allocation % = 100 - age , or even 120 - age for those with higher risk appetite.

Only at step 5 one considers how much to allocate into stock market, and then the choice of investment vehicles:

a) individual stocks, for people who like hands on; have time; have interest; believe in ability to beat the market
b) equity unit trusts - choose established fund houses; reasonable fund size and expenses; decide domestic versus foreign allocation; don't chase after hot funds
c) low cost ETFs to get exposure to major foreign markets (US, Europe, Asia Pacific)

A simple and good strategy for unit trust and ETFs is to do dollar cost averaging. Alternatively, use reversion to means for long term advantage.

After going through the steps, for many people, individual stock investment should only be a small percentage of total wealth. It's also best to start small. Only increase if there is track records to back up.

Posted by bang_miskin > 2022-02-10 18:49 | Report Abuse

@CharlesT we still don't know if China is the game changer.

For two decades we keep hearing about China being the game changer for many industries. For some yes, but not so for others (hello semiconductor). The current price reflects this uncertainty.

If you believe China will stomp our glove producers, should have walk off on August 2021. No need wait till now.

Some people like me are still holding, believing this is scare overblown.

In the next few years we shall see how our company respond to new competitors. Prices will adjust accordingly.

Posted by NatsukoMishima > 2022-02-10 22:09 |

Post removed.Why?

Posted by NatsukoMishima > 2022-02-10 22:12 | Report Abuse

Last chance for glove lovers to take back some capital before another 40 - 50 % drop due to single digit sens dividen n qr net loss !

Posted by JN88 > 2022-02-11 00:40 | Report Abuse

Local institutional bought DNEX and push to RM 1, last month alone institutional bought RM 250+million....
Be careful They may hold more than 100 milliom share... They now keep promoting and find customers to let go their ticket.... I expect NatsukoMishima is one of the promoter from Institutionan...

Posted by JN88 > 2022-02-11 00:42 | Report Abuse

DNex profit can't sustain..... As you check for the last five years very bad record.... China is strong now can compete v dnex

Posted by notcalvinlah > 2022-02-11 00:48 | Report Abuse

bungkus now the share price

Posted by CharlesT > 2022-02-11 06:27 | Report Abuse

bang_miskin @CharlesT we still don't know if China is the game changer.

Wait until u see glove co posting Q losses then u only believe ah?

But i think u will still dont believe also....lol

Posted by NatsukoMishima > 2022-02-11 09:01 |

Post removed.Why?

Posted by JN88 > 2022-02-11 09:12 | Report Abuse

I trust billionaire Kuan family, future is too far away....

Posted by JN88 > 2022-02-11 09:13 | Report Abuse

Glove counters like comfort, Careplus, supermx will loss money but not Harta, Topglove and Kossan.... You all need to study deeply

Posted by YourQuirkyWays29 > 2022-02-11 09:42 | Report Abuse

Thanks a lot @Observatory! Every single one of your comments has been helpful the past 2 days and opened my eyes to new stuff. Appreciate it!

Posted by hahaso > 2022-02-11 10:20 | Report Abuse

The Pfizer CEO said the Omicron vaccine will be launched in March.

I sold the glove stock, thank you

Posted by gghaha > 2022-02-11 10:22 | Report Abuse

all seems waiting below 5 only consider now

Posted by SinGor > 2022-02-11 10:33 | Report Abuse

it is better to wait after Super, Kossan and TOP announced their Results before you make
buy decision....Looks like all Glove Qr are bad news....one falling knife after another

Posted by NatsukoMishima > 2022-02-11 10:39 | Report Abuse

@
JN88 Glove counters like comfort, Careplus, supermx will loss money but not Harta, Topglove and Kossan.... You all need to study deeply
________________
No u are totally wrong , this time small company can survive but not big harta n top glove due to wage inflation n declining net profits , u must see how big their head counts now n minimum wage rm 1500 soon !

Cut production lines n lay off employees will happen soon when qr net loss emerge coming qr !

Harta will drop to rm 2.xx - 3.xx !

Posted by NatsukoMishima > 2022-02-11 10:42 | Report Abuse

Supermx n top glov will be more worst with their coming qr , we wont surprisr when only doible digit million net profits record !

Supermx will drop to 64 sens , top glove 80 - 1.20 !

Posted by NatsukoMishima > 2022-02-11 10:50 |

Post removed.Why?

Posted by rl68 > 2022-02-11 11:07 | Report Abuse

@observatory. I love to read your comment and I think it is time well spent reading on your insights. Please share with us your top 3 investment books with this community.

Posted by Oldinvestor99111 > 2022-02-11 12:03 | Report Abuse

Just watch for the bounce back on Monday

Posted by Anxious > 2022-02-11 13:25 | Report Abuse

Having an Omicron specific vaccine soon is not a surprise. The vaccine makers would have certainly tweaked their vaccines sooner or later esp with MRNA technology which allows them to do so. Omicron gave them an excuse to do it earlier.

Soon the developed world will get another round of vaccination ie the Omicron specific one. We may too and the vaccine makers continue to make bumper profits which the glover makers were enjoying earlier.

As for gloves stock it goes back to the basics of supply and demand. Unless we have another "pandemic", demand will decrease and supply increase until market reaches an equilibrium. When that happens and what the equilibrium is , is anybody's guess.

For Harta , the best we can expect is that it trades above RM5.00.

In the short term, ie the next month it could very well test its 52 week low of 4.95.

For the brave that may be a trading opportunity as it could bounce back 10% to 20% off such lows or more, esp if another bad variant emerges.

Posted by Anxious > 2022-02-11 13:30 | Report Abuse

I am predicting that Harta could possibly trade between RM4.00 to RM6.00 in 2022.

Looks like the only way to extricate myself out of this bad position is to try to trade my way out, at least to a less bad position.

Of course, I could also dig myself deeper...

Posted by Anxious > 2022-02-11 13:33 | Report Abuse

Consolation, based on recent disclosures to Bursa, EPF hasn't been selling much lately.

As we approach 52 week lows, the weak holders or traders should have all gone by now. Its only the shorties left...

Posted by bang_miskin > 2022-02-11 13:46 | Report Abuse

@Anxious, if you're not comfortable holding a large amount of glove stocks, you can wait for opportunities for prices to rebound and sell off a small portion. Hold whatever you think is best for your long-term portfolio. With other sectors rebounding, not hard to find other good counters to invest.

Forget about the past losses, instead think of the potential gain from other counters.

If you're already hold Harta for the past three quarters, you already have more than 60sen of dividend. A small consolation prize.

Posted by Anxious > 2022-02-11 13:59 | Report Abuse

@ Bang Miskin, yes the dividend is a small consolation.

I have some exposure in HK Tech stocks and although it is also down I am comfortable in holding and even adding in that. May even double down there.

If I do decide to reduce my hoding in Harta, may consider switching to that as I think it has better hope of doubling from current levels than glove stocks.

It remains risky but as the saying goes, no risk no gain.

But current share price of Harta is just too low for me to consider it yet. I think there may still be a 10% or more bounce somewhere from current levels, so I guess I'll just have to wait and see for now.

Thanks Bang Miskin for the comforting words. Appreciate it.

Posted by observatory > 2022-02-11 14:08 | Report Abuse

@rl68, I read quite widely. Over the years my readings have shaped the way I look at investing. Instead of three books, I suggest anyone interested in stock investing to focus on these three areas, in the sequence shown below:

1. Passive investing - First learn to respect the market. While we need not subscribe to the Efficient Market Hypothesis, we should have the humility to know it's difficult to outperform the market consistently, especially in the short term games where the element of luck outweighs skill. Check out John Bogle, Charles Ellis, William Bernstein, Burton Malkiel.

2. General stock investing - There are various investing methods like statistical value investing, growth value investing, momentum, technical, quantitative. My focus is on value investing. Read about stock market history and human behavior from Warren Buffett, Howard Marks, Jeremy Siegel, Daniel Kahneman.

3. Stock valuation - I believe value investing is the most dependable way to grow wealth in stock market. Valuation skill is integral to value investing because we have to estimate the intrinsic value before deciding to buy, hold or sell. Check out Pat Dorsey, Joel Greenblatt, Benjamin Graham, Bruce Greenwald, Aswath Damodaran.

You may first check out their book reviews and listen to their talks in YouTube. Then decide whether they are for you.

Posted by Sslee > 2022-02-11 14:21 | Report Abuse

The game changer is not the faults of Harta but the massive capacity increase by Thailand, Vietnam and China competitors which do not have labor problems.

By in the way the fault also on Harta of not using the super profit to expand upstream or downstream of glove manufacturing.

Posted by JSJH02 > 2022-02-11 14:45 | Report Abuse

Figure out what work in long term is a very powerful mental model.

Just think of what is going to work in long term. What is a sustainable business? there are few business models are work in long term. A simple and working one the low-cost producer. One of my favorite.

Harta is the lowest cost producer yet the most innovative glove manufacturer. They focus relentlessly to reduce cost, improve productivity and and quality of the product.

They are the 1st glove moving into Industrial 4.0, they digitized their plants (so far 3 plants have been fully digitalized).

They are trial running their automation of glove packing process, which is the bottleneck of the whole automation process currently. This very reduce their manpower required to be reduce by 20%, thus reduce cost.

They are the most efficient player that able to produce 50,000 pieces of glove per hour which is unmatchable.

They spend more resources that other players on R&D, and implement best practices. They are the 1st player that produce medical nitrile glove commercially. They achieved multiple industry 1st.

They focus on company culture and DNA that keep improving and innovating. Being a low cost producer is good but others will catch up one day. But develop a culture and DNA that keep improve on efficiency, lowering cost and innovating are far more crucial in long term.

Harta is a one of the most well manage company in Bursa, its management is honest and skilled. Instead of talking big, they focus on business. They always under promise but over deliver.

Glove is going to have a secular growth post covid, plus it is already a grow industry.

Harta have so many correct matrix as an investment.

Don't focus on share price but its business. They definitely will do well in future

Posted by NatsukoMishima > 2022-02-11 14:46 |

Post removed.Why?

Posted by observatory > 2022-02-11 15:05 | Report Abuse

Among local investors, Cold Eye deserves much respect. He is righteous and humble. He also embodies life long learning. Chinese readers should check out his autobiography on how he overcame childhood poverty to achieve late success.

Former (?) i3 forumer kcchong's books are also recommended. @Sslee may be in a better position to comment since his kind words are also included in the book!

Posted by alex > 2022-02-11 15:38 | Report Abuse

@NatsukoMishima

yes.. according to you dnex is the best counter in bursa..

pls invite your whole family and cousin to buy and all in... to get multiple folds gainz don't forget buy with margin account or borrow from bank to invest this cepat kaya counter ..

Posted by jolynce > 2022-02-11 16:02 | Report Abuse

@JSJH02 Thank you for your sharing. Along with your points below, I also concur with Observatory's point on value investing. The point is to buy the stock at a fair price, and even better when it's undervalued, but gotta be careful not to to be led into a value trap.

Posted by JSJH02 > Feb 11, 2022 2:45 PM | Report Abuse

Figure out what work in long term is a very powerful mental model.

Just think of what is going to work in long term. What is a sustainable business? there are few business models are work in long term. A simple and working one the low-cost producer. One of my favorite.

Harta is the lowest cost producer yet the most innovative glove manufacturer. They focus relentlessly to reduce cost, improve productivity and and quality of the product.

They are the 1st glove moving into Industrial 4.0, they digitized their plants (so far 3 plants have been fully digitalized).

They are trial running their automation of glove packing process, which is the bottleneck of the whole automation process currently. This very reduce their manpower required to be reduce by 20%, thus reduce cost.

They are the most efficient player that able to produce 50,000 pieces of glove per hour which is unmatchable.

They spend more resources that other players on R&D, and implement best practices. They are the 1st player that produce medical nitrile glove commercially. They achieved multiple industry 1st.

They focus on company culture and DNA that keep improving and innovating. Being a low cost producer is good but others will catch up one day. But develop a culture and DNA that keep improve on efficiency, lowering cost and innovating are far more crucial in long term.

Harta is a one of the most well manage company in Bursa, its management is honest and skilled. Instead of talking big, they focus on business. They always under promise but over deliver.

Glove is going to have a secular growth post covid, plus it is already a grow industry.

Harta have so many correct matrix as an investment.

Don't focus on share price but its business. They definitely will do well in future

Posted by bang_miskin > 2022-02-11 16:03 | Report Abuse

@Anxious

Might also want to keep an eye on Kossan's QR, it should come out anytime soon (maybe next week). If Kossan result is similar to Harta's expect price to move down. But if Kossan's result is better than expectation, we may see a small rebound in price.

Also it is always good to have a diversified portfolio. Put a little of each in banking, consumer goods, plantation, oil and gas, chemicals, gaming...etc. With a diversified portfolio, you won't get such a big hit from a single events. At any given time, one industry gains partially offsets from another industry losses. It's more stable. Doubling down on any single particular industry (say putting most in tech) increases the risk. Even a single bad news could have a major impact on portfolio.

Posted by JN88 > 2022-02-11 17:00 | Report Abuse

A bit disappointed EPF didn't push below RM 5, hopefully next week push below RM 5 so we can collect

Posted by IronShirt > 2022-02-11 17:11 | Report Abuse

most bankers had predicted the wrong way, just like TOP. If no support next week, most likely
Harta is plunging below RM5 heading 4.0

Posted by Oldinvestor99111 > 2022-02-11 17:24 | Report Abuse

With covid cases rising this weekend, there’ll be a breakout on Monday

Posted by Mini2021 > 2022-02-11 19:19 | Report Abuse

EPF waiting Kossan and Supermx result as catalyst to push down the price.....

Posted by TillyLovers > 2022-02-11 21:31 | Report Abuse

Will the counter back to RM 5.50 within this month?

Posted by observatory > 2022-02-11 22:06 | Report Abuse

On EPF. I feel that there is little value for long term shareholders to follow EPF trading. Shareholding changes by EPF are the probably the most common announcements in Bursa. Sometimes for the same company, one manager for EPF will sell and another will buy, all in the same day! It only serves to create liquidity and generate some incomes for Bursa and the government.

Posted by observatory > 2022-02-11 22:12 | Report Abuse

On Chinese competition again.

As mentioned earlier, one of the top players there, Blue Sail Medical, lost money in third quarter 2021. Note this was the quarter where Malaysian players were hit with 2 week EMCO closure and subsequent partial operations. It was China's opportunity to expand. But Blue Sail still lost money. Operating margin was a mere 4%. After financing cost, it was in red.

Of course Intco Medical will be a far more formidable rival. But the lesson here is China's manufacturing prowess doesn't necessarily mean Chinese glove makers are better and will crush Malaysian producers.

However, they can be the spoiler. Even if they are less competitive (not sure about Intco yet), they may be bent on expanding market share with little regard on profitability. Flush with cash, Intco could fight a war of attrition if it chooses to.

We have to see whether Malaysian advantages are overwhelming enough such as Liu Fangyi, an industry veteran, knows he has no chance of supplanting Malaysian producers as he has vowed earlier.

Note Liu Fangyi divested some shares last year, purportedly to pay of his earlier borrowing which he invested into the company for expansion.

Posted by tonypang01 > 2022-02-12 09:55 | Report Abuse

@observatory, will you buy in Harta? if yes what are the reason u choose Harta vs other big 3? what unique on Harta?

Posted by NatsukoMishima > 2022-02-12 09:57 |

Post removed.Why?

Posted by observatory > 2022-02-12 14:50 | Report Abuse

@tonypang01, I owned glove stocks before the pandemic, but sold them down as price went crazy in 2020. I've started to add back, including Harta. But I won't be in a hurry.

One quick and dirty way to value the stocks, as I've written above, is to assume pre-pandemic level of net profit in the near future, and work out the forward PE. However this method will underestimate companies which have expanded capacities enormously, or those with very high net cash versus market cap.

For example, Kossan annual net profit before pandemic was slightly over RM200m. Assume RM250m net profit in the near future. Current market cap RM4.4 billion. PE is about 18 times. However, Kossan has a net cash of RM1,638m, or close to 40% of market cap. While I won't value the cash fully, it should be worth something.

Supermax pre-pandemic annual earning was above RM100m. Assume RM150m in the near term. Current market cap RM3.2 billion. PE about 21 times. However, Supermax has a net cash of RM3,187m, or about 100% of market cap! But consider the cash will be used for major capacity expansion including in the US, and consider it's currently under sanction, what should be the value?

Undoubtedly Harta is the best managed among them, as evident in the past growth, higher operating margin, higher ROE and ROIC, and generous dividend payout. But its valuation is also higher.
https://financials.morningstar.com/ratios/r.html?t=0P0000JD97&culture=en&platform=sal

Posted by tonypang01 > 2022-02-12 17:03 | Report Abuse

@observatory thanks for your valuable sharing, among big 4 which you think have the best value and in term of ROI? also what do you think on Top Glove?

Posted by observatory > 2022-02-12 20:13 | Report Abuse

@tonypang01, Top Glove pre-pandemic earnings was above RM400m per year. The company has since expanded its capacity by nearly half. Let's assume upon normalization, sales can keep up and margin remains like pre-Covid. So earning increases proportionally, say reaching RM700m. With current market cap is RM17.7b, implied forward PE is 25 times.

But Top Glove has almost zero net cash now (after deducting perpetual sukuk). It may manage to raise cash via HK listing but at the expense of equity dilution. The plus is being the largest producer may confer advantages.

With this naïve calculation, the forward PE of Harta at 34X > Top Glove 25X > Supermax & Kossan at about 20X.

Net cash consideration: Harta ~15% market cap, Top Glove zero, Kossan 40%, Supermax 100% (but watch out whether Supermax may squander its cash in US, not to mention we have no idea when sanctions will be lifted)

Based on the relative track records of these firms, the market seems to have priced them in the right sequence. I have no idea which one offers a better tradeoff.

Maybe split the bet? Maybe wait until there is more clarity on future normalization path?

Posted by tanyaozongyaozong > 2022-02-12 21:24 | Report Abuse

With covid multiplying further and further, expect high bounce on Monday

Posted by tonypang01 > 2022-02-12 21:57 | Report Abuse

@Observatory wow...u really did a lot of homework b4 invest. Can you give yr view on TG Sukuk 1.295B (as per latest QR), how this sukuk work? if based on Kossan 40% nett cash, does Kossan also is under value now? if you give you rank list of investment in glove which one will be 1,2,3,4? thanks for sharing and really many things to learn from you

Posted by observatory > 2022-02-12 23:06 | Report Abuse

Sukuks are just Syariah compliant bonds. Net cash = cash + cash like instruments (e.g. unit trusts) - interest bearing debts (e.g. bank borrowings, bonds). Suggest to track every quarter.

As mentioned earlier, I have no idea which stocks offer better value. There is a tradeoff between perceived quality and valuation. If not sure, split the investment.

But prices may not bottom until there are greater clarities on competition, industry capacity and impact on margin. So this is a time to continue doing homework if you believe the sector could regain its secular growth.