Upgrade to BUY (previously NEUTRAL) with a revised TP of RM1.17 (previously RM0.97). We maintain our earnings forecast for FY20E/FY21F and roll over our valuation to peg our TP to FY21F EPS of 8.97 sen. Our PER of 13.0x is unchanged. Looking past 1HFY19, we expect operational and financial improvement at Superlon to enhance its profitability in FY21F.
Another catalyst is lower raw material cost that prolongs. Since end-October, certain main raw ( butadiene) material cost has eased by 60-70%.
Dont refer solely to butadiene price chart! It doesn’t reflect exact superlon cost material! Attached above was nitrile butadiene rubber price chart! The NbR price back to 2017 price where superlon recorded 43% gross profit margin!
6 weeks stop production, administrative expenses increased still can get good profits. Next QR EPS at least 3 cents. Low material cost now. Hope next QR more than 3 cents.
do take note that when scgm rally due to higher profit few years back during oil price bearish, superln parallel move up, but now scgm already hit 2.40, superln still .67
anytime volume will come and start to fly, so better dont wait to collect while at low
Post a Comment
People who like this
New Topic
You should check in on some of those fields below.
Title
Category
Comment
Confirmation
Click Confirm to delete this Forum Thread and all the associated comments.
New IPO: The onshore and offshore support services provider for the O&G industry, Steel Hawk Bhd aims to list on the Ace Market!
MQ Trader 2909 views | 2 d ago
0:17
New IPO: The largest mini-market player and a leading groceries retailer in Malaysia, 99 Speed Mart Retail Holdings Bhd aims to list on the Main Market!
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....
Goldberg
2,918 posts
Posted by Goldberg > 2020-06-11 09:56 | Report Abuse
Upgrade to BUY (previously NEUTRAL) with a revised TP of RM1.17 (previously RM0.97). We maintain our earnings forecast for FY20E/FY21F and roll over our valuation to peg our TP to FY21F EPS of 8.97 sen. Our PER of 13.0x is unchanged. Looking past 1HFY19, we expect operational and financial improvement at Superlon to enhance its profitability in FY21F.
Another catalyst is lower raw material cost that prolongs. Since end-October, certain main raw ( butadiene) material cost has eased by 60-70%.
March 2017 butadiene price @ USD 2150.
Now June 2020 butadiene price @ USD 370.
Source: MIDF Research