Superlon new production of fitness mat are having overwhelming result during the MCO period.
During MCO, many lady / women stay at home doing Yoga, and everyone has Superlon quickly launch their High Quality Affordable Price NBR Fitness Mat, and it is booming.
Very soon i think Lululemon will ask Superlon to OEM their fitness mat.
Upgrade to buy with a higher target price (TP) of ***RM1.17*** : We came back from Superlon Holdings Bhd’s investor briefing feeling more positive about its outlook. For the first half ended Oct 31, 2019 (1HFY20), the company posted a gross profit (GP) margin of about 27%, six percentage points lower than a year ago mainly due to higher sales to low margin markets and lower efficiency in the Vietnam factory as well as higher raw material costs. On the other hand, the higher GP margin product from a new customer has only started to pick up and we estimate that the orders make up about 10% of its year-to-date volume. Looking ahead, we expect this customer to contribute about 20% of its total volume, which should improve its overall GP margin in the coming quarters.
Meanwhile, Superlon management updated that the utilisation rate at its Vietnam plant has ramped up to about 50% as of the second quarter of FY20 (2QFY20), compared with 30% in 4QFY19 when the plant was completed. We believe the plant is on track to break even operationally and that could help ease its profit margin going forward. This is sooner than expected as the management had previously targeted utilisation rate to reach about 50% by April 2020. Looking past the break-even point, we expect further improvement in profit margin due to the tax break in Vietnam, which may kick in in the coming quarters considering operational momentum that is well on track.
chickmonk, sure can limit up... This counter used to be SCGM good brother. Now SCGM so high d, i think this counter neede at least 3 days limit up then only fair to him.
KEY INVESTMENT HIGHLIGHTS Higher margin product contributing Vietnam operations breaking even Competition continues in India, expanding footprint elsewhere Upgrade to BUY (previously NEUTRAL) with a revised TP of RM1.17 (previously RM0.97)
Higher margin product contributing. We came back from Superlon’s investor briefing feeling more positive of its outlook. For 1HFY20, GP margin recorded ~27%, which is 6ppt lower than a year ago mainly due to higher sales to low margin markets and lower efficiency in the Vietnam factory as well as higher raw material costs. On the other hand, the higher GP margin product from a new customer has only started to pick up and we estimate that the orders making up about 10% of its ytd volume. Looking ahead, we expect this customer to contribute ~20% of its total volume, which should improve its overall GP margin in the coming quarters.
Vietnam operations breaking even. Meanwhile, management updated that the utilisation rate at its Vietnam plant has ramped up to about 50% as of 2QFY20, compared to 30% in 4QFY19 when the plant was completed. We believe that the plant is on track to break even operationally and that could help ease its profit margin going forward. This happens sooner-than-expected as management had previously targeted utilisation rate to reach ~50% by April 2020. Looking past the break-even point, we expect further improvement in profit margin due to the tax break in Vietnam, which may kick in the coming quarters considering operational momentum that is well on-track.
i checked Top Glove's analyst briefing notes..... butadiene is at rock bottom price ALL TIME HISTORIC LOW the last quarter...this is Superlon's main raw material so good results should be coming....
Superlon Holdings surged higher to challenge the RM0.835 resistance level. With the momentum indicator RSI pointing upward, coupled with higher trading volume, we foresee that it could continue to travel towards the short-term target prices of RM0.895 and RM0.935. If it fails to trade above the resistance level, expect a sideway consolidation movement. In this case, the downside support is marked at RM0.785, whereby traders may exit on a breach to avoid the risk of a further correction
Trading Call: Buy on breakout RM0.835 Target: RM0.895, RM0.935
when profit growth is clear and price at low, its time to collect, will not be fast money (due to lack of interest - weak TA), but for sure it will come
patience is profit
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....
blood7
254 posts
Posted by blood7 > 2020-07-22 12:48 | Report Abuse
good luck.... i bought long time already average around 0.63, now just waiting only....