The Edge have been pessimistic for many months now.

Expansion rush just part of a normal business cycle. When there is rising demand, any sensible business will invest to raise their capacity. This is an investment risk that the companies need to take.

As investors, we have the privilege to cabut if it doesn't go well next year. For now, we enjoice.

Just another usual day in the market. Big4 ended roughly unchanged.

Cut loss if you are holding PohKong and Tomei. Retailers are not long-term beneficiary of a hike in gold price. Their recent meteoric rise is a pure bubble. You should know that they are in the business of buying and selling gold. When gold price goes up, yes their sale price goes up, but so does their cost. They only benefit from their old stocks which were bought at lower prices. But in the long run, it evens out. Gold bull run doesn't justify their limit ups.

If you are holding gold miners, I got no advice - I don't know how their business work. Maybe can hold?

This post has been edited by ComingBackSoon: Aug 11 2020, 06:24 PM

Share with you my story.

"-25% just way too much to cut loss"
"-50% just way too much to cut loss"
"-75% just way too much to cut loss"
"just hold it further and see how the market moves"

And I'm still holding -97% now.

Tuition fee fully paid. Lesson learned - there is no such thing as "too much to cut loss" when the counter is long term bearish.

Sapura Kencing.

Gold may not turn bearish.

But the gold counters that kena pumped and dumped hard might... Investors who caught it at the peak of the pump will suffer big time.

Totally agree with you on the Glove though. That time everyone laugh at the idiot who bought at RM18, only to see the price fall to RM14 within days. But if that "idiot" is still holding the RM18 shares he bought, he would be a happy man now.

This post has been edited by ComingBackSoon: Aug 11 2020, 07:29 PM

They didn't downgrade. Had always been RM26.70 since their last report in mid July.

Anyway I read all the analyst report that are publicly available. Sharing my conclusion:

Consensus TP is about RM30 now (I excluded Affin who TP RM46.40... kind of outlier compared to the rest).
Consensus FY20 PAT RM1.4b (TG needs to achieve RM825m in the upcoming quarter, up by 2.3x q-o-q)
Consensus FY20 PAT Margin 19% (TG needs to achieve 23.5% margin in the upcoming quarter, last quarter recorded 20.60%)

Price now is RM27.3. Upside to consensus TP of RM30 is roughly 10% profit.

Can TG achieve or beat consensus target? I'm betting yes, and here's why:

1) TG only needs to improve PAT margin by 3% - granted, it may not achieve the 40% crazy margin achieved by Supermax. But CIMB's report says that in August alone, TG's ASP grew 25% m-o-m.
2) TG needs to increase profit by 2.3x qoq - Hartalega which is heavily OEM also can record 2x jump in profit for the quarter ended June. TG OEM is between Supermax and Hartalega. Achieving 2.3x PAT growth q-o-q is believable to me.

I beg to differ with your opinion that only supermax is safe.

Supermax achieved this amazing profit margin by charging absurdly high prices to their customers and cutting off distribution agents which helped them grow.

They have to manage the relationship with their customers and middleman very carefully. People remember what you did to them in times of distress. If Supermax does not manage this carefully they will find themselves in a tough position when the market tilts towards an oversupply situation

Do you have any contacts who are in the industry? Talk to them. It is not a secret.

After all my analysis yesterday, I'd be stupid to not top up at this wonderful opportunity... Fired 2nd bullet and top up at at 25.68, with a 3rd bullet queue at 24.88.

This post has been edited by ComingBackSoon: Aug 12 2020, 09:46 AM

Not everything is a "guessing game".

Sales order have already been locked and there is a backlog of more than 12-15 months. All glove companies will report amazing profit for the next 3-4 quarters at least.

However, this level of profit is definitely not sustainable. It will slide down significantly in 2022 onwards due to an increase in industry capacity.

The big guess is how long the demand can stay. How long the virus can stay?

This post has been edited by ComingBackSoon: Aug 12 2020, 10:04 AM

Which 1 got PE of 250?

I'm holding TG and carepls. No where near PE 250.

Seems like gonna limit down today.

RM24.88 hit.

I hope I am damn right about this. Don't dare to go for 4th and 5th round. Gonna sit on sideline.

My god this is falling too fast.

Extreme volatility now... Whoever bought Carepls at limit down, now sitting on 20% gain...

Totally didn't expect it to go below 24.00. Not this fast... Confidence was shaken for a moment man even though initially I fully believe in their profits.

You are the legend bro.

Haha "recover" you mean.

Seems like we all forgot yesterday's closing is freaking RM27.30!

This shock is reminder to myself also. Too "used" to recent market keep achieving new highs.

Confidence shaken when carepls hit limit down and TG hit below RM24.

This shock will differentiate the speculators looking for a quick buck, and the long term believers (whether such belief is justified or not)...

Sales is over... In a blink of eye.