Well, try to put the buybacks into perspective of that posting.

On the 9th..



TG did made a buyback on that day...

1,392,000 shares were bought. Amount paid RM 9,995,061.12. Price was between 7.11 and 7.21

9 million. Normal buyback from any company...

Stock continued to slide big time. Double top with the stock trading breaking down fast the neckline... that would easily be sell trigger for some...



Later that day... the announcement.... 14,930,000 shares shares were bought.
This was a massive share buyback. RM 99,934,285.00 was the value!
DO search the Bursa historical share buyback.
Has there ever been another share buyback of such magnitude in value?

price paid was between 6.12 and 7.40!

okay shares were plunging... maybe they thought is was a good idea to defend the price as hell. TG closed 6.45 that day.

And the next day ... another 13,420,000 shares were bought!!!

Another massive buyback. Value was RM 99,972,625.50

But get this..... price of the buybacks was between 6.20 and 8.00

ahem.... that CLEARLY drove the prices higher. Well... the data is there.... and do tell me I am wrong!Tell me I am wrong that the buyback did not drive the share price higher!

Utterly reckless. That's my opinion. Well, if you reckon that it's staged and well planned... well, that's your right of opinion.


and btw... I posted the screenshot of TG last reported QR. Look at their bank balances (yeah, bank balances would have improved since then) ....not a whole lot of cash to be doing buybacks of such magnitude!

This post has been edited by Boon3: Sep 15 2020, 09:05 AM

If you do notice, I tend to shy away from stocks which has questionable owners.... cause I believe that leopards don't lose their spots....

it's like .... say... AirAsia... I view what the owners do rather seriously... which is why I won't touch their stocks.... even if one day, a great stock recovery is possible.

Yup, if I don't trust the owners, I avoid.... it's like what the say about stock market cliches that the owners would cheat on you the minute you had their backs turned on them (I believe this is a phrase from Livermore book)....

in that perspective... Genting ... a serial RPTer ..... always using Genting Malaysia as their own private atm.....

Biggest dislike was how it conducted itself during the Aspion saga with Adventa. What happened totally blew my mind. (posted on it b4. )

Yup.

But do understand that I don't simply mouth off on something. The signs were there.

Yea, on theory share buyback is noble and also by theory it increases shareholder value. But let's be honest here. This is the stock market we are talking about, and in the stock market abuses happens so regularly.

Can share buy backs be abused? Answer? If the share buybacks specifically drives the stock higher. In short, local lingo, they goreng the bugger higher. Well, that's for me, is reckless. Which is why I said what said.

That said date... 11th Sept... says it all.

I wrote..



I should not have been lazy. I should showed you the stock trading data for that said date...



The stock traded between 6.15 and 8.03 and closed at 7.76.

The buyback was from 6.20 to 8.00.

How? Wasn't it undeniably that TG buybacks drove the stock higher on the 11th?

Dunno about you but this is crystal clear to me....



Anyway... in regardless, that's in the past already. And please do realise I have zero vested interest and I will not have any in TG. Okay. My disclaimer. Lol. And yeah... a pinch of salt and tequila... that be nice.

Have a good Msia day!!

Of course there is a need to do so. You are one whom I newly interact with. You do not know me. So it's best I declare from the start.

But then of course... it's the bloody Internet. Who cares ya?

Lol

When you do share buybacks, you do not want anything like share disposal or even ESOS to be happening the same time....

Reason rather obvious ya....

and in TG case, the ESOS and the timing of the share buybacks ....

The announcement on the 10th Sep >>>>

1. Details of corporate proposal
Whether the corporate proposal involves the issuance of new type and new class
of securities? N
Types of corporate proposal : ESOS
Details of corporate proposal : Employees' Stock Option Scheme
No. of shares issued under this corporate proposal : 542,600
Issue price per share ($$) : 1.5400
Par Value ($$) (if applicable) : 0.000
Latest issued share capital after the above corporate proposal
In the following
Units : 8,128,619,774
Issued Share Capital ($$) : Malaysian Ringgit (MYR) 1,679,850,644.400
Listing Date : 10/09/2020

2. Details of corporate proposal
Whether the corporate proposal involves the issuance of new type and new class
of securities? N
Types of corporate proposal : ESOS
Details of corporate proposal : Employees' Stock Option Scheme
No. of shares issued under this corporate proposal : 1,767,100
Issue price per share ($$) : 1.5700
Par Value ($$) (if applicable) : 0.000
Latest issued share capital after the above corporate proposal
In the following
Units : 8,130,386,874
Issued Share Capital ($$) : Malaysian Ringgit (MYR) 1,682,801,701.400
Listing Date : 10/09/2020

3. Details of corporate proposal
Whether the corporate proposal involves the issuance of new type and new class
of securities? N
Types of corporate proposal : ESOS
Details of corporate proposal : Employees' Stock Option Scheme
No. of shares issued under this corporate proposal : 1,829,700
Issue price per share ($$) : 1.6300
Par Value ($$) (if applicable) : 0.000
Latest issued share capital after the above corporate proposal
In the following
Units : 8,132,216,574
Issued Share Capital ($$) : Malaysian Ringgit (MYR) 1,685,967,082.400
Listing Date : 10/09/2020

4. Details of corporate proposal
Whether the corporate proposal involves the issuance of new type and new class
of securities? N
Types of corporate proposal : ESOS
Details of corporate proposal : Employees' Stock Option Scheme
No. of shares issued under this corporate proposal : 419,600
Issue price per share ($$) : 1.6900
Par Value ($$) (if applicable) : 0.000
Latest issued share capital after the above corporate proposal
In the following
Units : 8,132,636,174
Issued Share Capital ($$) : Malaysian Ringgit (MYR) 1,686,718,166.400
Listing Date : 10/09/2020

5. Details of corporate proposal
Whether the corporate proposal involves the issuance of new type and new class
of securities? N
Types of corporate proposal : ESOS
Details of corporate proposal : Employees' Stock Option Scheme
No. of shares issued under this corporate proposal : 677,700
Issue price per share ($$) : 3.3000
Par Value ($$) (if applicable) : 0.000
Latest issued share capital after the above corporate proposal
In the following
Units : 8,133,313,874
Issued Share Capital ($$) : Malaysian Ringgit (MYR) 1,689,157,886.400
Listing Date : 10/09/2020

6. Details of corporate proposal
Whether the corporate proposal involves the issuance of new type and new class
of securities? N
Types of corporate proposal : ESOS
Details of corporate proposal : Employees' Stock Option Scheme
No. of shares issued under this corporate proposal : 900
Issue price per share ($$) : 4.2500
Par Value ($$) (if applicable) : 0.000
Latest issued share capital after the above corporate proposal
In the following
Units : 8,133,314,774
Issued Share Capital ($$) : Malaysian Ringgit (MYR) 1,689,151,044.800
Listing Date : 10/09/2020
Remarks:

>>>> the 2nd and the 3rd ESOS listing was rather huge, yes? ....

8.5 sen divide by current share price = indicative dividend yield lo... good?

The other day... CIMB leng chai...



FY 21 estimate profits = 5.313 billion or 1.325 billion profit per quarter.

Beat expectations or more the less meet expectation?




pe38? cannot use like that cos of the explosive profit growth.



yes... the profits were really, really, really good.... but as good as it is... the profits were only as expected....

Oooh...... looked into the BS......

and the bloody elephant in the room is that TG has its hand in the money market funds.....

normally it's ok .... to put some extra money into market funds... but this TG ..... i think is way too aggressive....
it's got some 1.6 BILLION ringgit in money market funds...

and when the company put in so much money in, you think they would be more transparent and describe clearly what type of money market fund does 1.6 Billion ringgit buy!!!

scary

Oh yes.... you are right but the problem is that TG is not saying what type of money market fund (which is simply way too general) .....


so are we to guess what?

First.... did TG beat expectation? of did it meet the expectation?

me? Basing on the CIMB numbers, it's just about meet expectation only nia.....

so .... isn't this a meh?

It wasn't really a prediction. It was based on my interpretation (which might be wrong) that the glove market was driven so high early on based on way too optimistic earnings projections. When one by one, started missing the earnings projection, despite really fantastic earnings, I felt we are at the point where the market is way, way ahead. Meeting earnings projection is not gonna be enough. It's got to beat these analysts projections to make them go WOW and force these buggers to rewrite a whole new script with much higher numbers (which will ultimately leads to higher TPs ... which leads to higher stock prices)

Without it... it's a meh....

It's what they predicted.... so ... there's nothing new really.

That's how I saw it...

Now looking ahead... TG earnings is really great. No doubt.... but like I said... it's all been projected that TG will earn so much already (which is why TG trading at such high prices..... anyway.... the concern now is ....

1. The ASP issue... this for me... is the main driver ....

I wrote this b4...

as it is... I am not a believer one can increase ASP all the time... sooner or later ... the customer will give u the finger
and esp. when the customers read all about the insane profits glove makers are churning out...
customers are not stupid..... this is what I have always believe in the business world....

.... and brokerage houses like MacQuarie and even CIMB recognizes this issue.... so in their core number tables, one can see the sharp downtrend comes fy22.

this was even reflected in Harta's news...

https://www.theedgemarkets.com/article/hart...analysts-expect




A bit of irony there.... cos for Harta's own performances.... the analysts were way too optimistic as Harta greatly underperformed ....

But anyway..... the key.... is that sharp contraction....


Which puts us in a very unique situation...

which is we could see continued strong earnings performance but these earnings performances is like a time bomb.... it could just end just like that when ASP starts falling....

Take TG.... next reporting quarter is 2021 Q1 ..... the profits is projected to contract/ease/plunge ....come fy 2022....

this is THE MAIN RISK......

which you need to ask if the RISK/REWARD is worthwhile for you to trade/invest in it now......


Yes... sooner or later ... the ASP will come down. Once it does, profits will contract.... and when you factor in the fact every Ali, Muthu and Ah Seng is jumping into the glove making bandwagon, you get over capacity and you know these extra ordinary times would come to an end... ie ... the boom boom profit growth will be gone (ah.. not saying glove makers would lose money but just saying their profits could return back to pre C19 days) .....

meanwhile.... I have no idea how the stock would trade....

Was dying to get CIMB rocket report.....

Well? It's own estimates table is still saying the same thing... once the boom ends, the profit will contract/ease/plunge sharply....

Of course.... that leng chai dared not to mention... yup... he left it there for you the reader to figure it out...



so what he did was ... to 'rewrite' the fy21 numbers higher.... so much higher.... profits are now estimated to be 10 billion for the year...

ROFLMAO !!!!

see how they did it below....



see how extremely high they raised the bar? That's easily 2 billion in profit per quarter for fy 21!!!

LOL!!!!!!!

and... when TG next reports a profit of 1.8 billion for the next quarter, which is utterly fantastic, but the numbers is falling way short of estimates....

LOL!.... another meh moment....

BUT GET THIS.....

see how the earnings will contract after that?

Isn't this the big elephant in the room risk? If the profit could contract so sharply, why isn't CIMB declaring it as a downside risk?




Let me say this about the ASP..... no business can simply increase and increase and increase the ASP lwithout a care in the world.... and certainly not when the eyes of the world read you just made 1.3 billion in profits.

Customers are not stupid.....

Some are very spiteful... some believe in Karma.... there will be consequences!!!


this was the previous report...



and yeah... the other thing that certainly doesn't make sense is the fy 21 numbers.... see their old numbers is 5.313 billion? The new revised numbers is 10.378 billion?

What doesn't make sense is they revised the profit from 5.313 billion to 10.378 billion.... 95% increase....

if CIMB lengchai truly believes that the profit can increase so much, why the TP only increase from 9,20 to 10.00?

LOL!! Yup... cannot brain.

and this is Kenanga report...



Same same....

Huge profit for fy 21 estimated.... but just like MacQauarie and CIMB.... Kenanga has finally introduces/shows its fy 22 estimates....
and it too shows sharp contraction....

But CIMB leng chai should at least learn some integrity by declaring that lower than expected ASP is a downside risk!



and yeah... so unrealistic... CIMB and Kenanga still basing the TP on fy 21 numbers!

LOL!

isn't it extremely short sighted?

Question for CIMB and Kenanga...

6 months down the road .... your target price will be based on fy 21 or fy 22 numbers ah?




Get this issue/problem/risk?

If they base on fy 22 numbers ..... won't the TP price forced to be much lower?

So how many research houses are saying the same earnings trend for fy22? (which is just 5 quarters away?)

M, CIMB and Kenanga?

And M is the only one calling it as it is based on fy22 estimates?

If I have came out with those earnings estimates, the right thing to do is call it.....

You are very focused on the TP set.

I rather see how and what are the perimeters used in deriving the TP, ie I rather look at the estimated profits and the earnings multiple they used.

Let's do the first one. My Google search is based on 'Credit Suisse Top Glove target price'. I used it because right away I see something amiss.

Anyway... http://www.google.com/search?source=androi...0target%20price

Straightaway I see the 37. Which is somewhat closer what I remembered browsing the news.

This is the article to read...

https://www.theedgemarkets.com/article/cred...cts-record-fy21

Rm23 tp... That was very high then, yes?

1."According to management, some of these orders were priced above US$100 per 1000 pieces, which is more than three times higher than the current blended ASP for the normal orders," Cheah said.

This is what he got from the management.. which is also reflected/mentioned in another Edge article...

Quote: KUALA LUMPUR (Sept 17): Top Glove Corp Bhd has guided that the average selling price (ASP) for its nitrile gloves will increase by 30% in October, 15% in November and perhaps another 10% after November, as outlook for the group and the glove industry remains promising.

*and it again reflects the very strong role ASP plays in this extraordinary profit growth stage *

**do check pre covid prices - again.. my simplistic argument is how long they can play this increasing ASP price game. Are their customers so ignorant the insane profit windfall for glove makers blah blah blah.. *

2. In addition, while the company was previously guiding for 5%-10% increases in ASP every quarter, given the further squeeze in demand-supply for gloves, it was now guiding for a monthly double-digit ASP increase at least for the next two months.

"Given the revised strategy and ASP guidance by the company, we have raised our FY20 (financial year 2020)-FY22 earnings per share by 20%-135%. We now expect the group's earnings to grow 182% in FY20, a further 122% in FY21 but decline by 63% in FY22 as ASP normalises.

Aha... See? They are all saying the same thing. Once ASP normalises, earnings will decline by 63%.

This risk is noted in June....

But guess what? Everyone was focused on the nice TP of 23...they totally ignored the risk....

Now it's slowly being in focused. Oops! Lol I realised its not UBS. Yup somehow I searched credit Suisse instead of UBS.

Can't find the UBS link but saw the image. Lol.



And as you can see.. it's the same story... Fy22 earnings declines as ASP normalises...

Well... like it or not... That's one of the main risk now.

1) Come the next quarter, company like TG will be reporting FY 21 Q1 so will Superman.

So logically speaking, these scientists can no longer based their TP on FY 21 numbers. It HAS TO BASE THEIR TP OB FY22 numbers....

2) ASP, ASP, ASP .....

this is the VERY ESSSENCE of the profit growth. The MULTIPLIER effect on the profit.

2 b) Just yesterday....
https://www.theedgemarkets.com/article/asp-...-says-top-glove

Quote: Top Glove Corp Bhd has guided that the average selling price (ASP) for its nitrile gloves will increase by 30% in October, 15% in November and perhaps another 10% after November, as outlook for the group and the glove industry remains promising.

As of this month, the group's ASP for nitrile gloves stands at US$70 per 1,000 pieces. Nitrile gloves production occupied almost 60% of the total group's production, while the remainder comprised latex and vinyl gloves.


TG own guidance hor.... 70 X 1.3 x 1.15 ~ US104.65 per 1000 pcs.

and from this Edge article... we can make comparison....

https://www.theedgemarkets.com/article/sell...w-signs-peaking

Quote: On average, the current ASPs of nitrile and rubber gloves are US$50, and US$30 to US$40 per 1,000 gloves — more than double the pre-Covid-19 levels of US$21 and US$17 respectively.

ASP will be more than triple come end of the year....

This is the boom boom boom factor in my opinion.

Which clearly in business, such ASP can not be sustained.. the prices are absolutely insane....

Profiteering in times of crisis?

3) So without this multiplier effect... ie... when the ASP normalises back .... the decline in profits will be drastic......

That is LOGICALLY the risk.

4) So how long do you think glove makers customers will be held to this exorbitant rise in prices?

As I said b4... in the business world... buyers are not that water fish .... if the the glove makers do not show restrain in controlling the spiraling ASP, buyers will.
and the consequences will be ugly in the future.

5) Good reference is the MPI case of the glory semicond bull days.... I do not have the data but from what I was told... MPI run, which was so much more glorious than the current glove makers, ended despite it reporting profit growth... yup... the stock declined before MPI's earnings started to decline... again not saying this will be the case for the glove makers... but an understanding of past rise and fall of the glory stocks would not hurt one's awareness.



take care.....



these glove comments are getting too tedious for me.... I just wanna shake my legs....

This post has been edited by Boon3: Sep 19 2020, 12:10 PM

1. M is one of the big call warrants issuer in Malaysia.

In 2018, it issued 1,000 structures. That's how big they are as a banker.

source: https://www.thestar.com.my/business/busines...nts-in-malaysia

2. Think of it as simple as what you are saying... so they lose 'big' ..... but how many other time have you heard M losing?

Think percentage wise.... think of 2018 numbers (i can't search the 2019 or 2020 numbers) if lose say 10 lah.... 10 out 1000 .... u think M gonna cry or close shop because of one loss?

3. Issuers hedge their bet.... for example....

https://www.malaysiawarrants.com.my/education/faq

No, warrants are not a ‘zero sum game’. The aim of the issuer is to make a profit on the risk management of the warrants sold, in doing so they also take on risk. When issuers sell warrants, they will normally buy shares or other derivatives to ‘hedge’ their positions and attempt to capture a margin whether the share price goes up or down.

For example, when an issuer sells a call warrant they will usually go into the underlying market and buy the shares to hedge themselves. Thus, if the share price increases, and investors profit on their call warrants, the issuer will also gain on their shareholding.

It is a common misunderstanding that issuers want investors to lose money. In fact, it is quite the opposite. If investors lose money, they will likely not trade warrants again, whereas if they profit from trading warrants they are more likely to continue trading and the market will grow.

4. Have you seen the past 30 days prices and TRANSACTIONS DONE for the stock...
here...



How to lose big money when the warrant is hardly traded?


5. LOL! Yes! M is in the focus because it was the first to downgrade TopGlove currently. But as shown clearly, other banks had the same set of data which shows contraction in profits come 2020... so why blame M for the sharp correction earlier on? I could give many other logical reasons why the correction happen.... so need to do the blame game?

Seriously.... we cannot be so narrow minded la.... the stock was due for that correction and if you want to be a great trader, you should not lose focus .


6. I saw the CS writeup... it gave the same set of warning... post later...



This post has been edited by Boon3: Sep 23 2020, 09:15 AM

The arrows..... Credit Suisse is basically saying the same exact thing as many others.... which is fy22 profits is estimated to show a huge decline.... here CS is suggesting a 55% plunge.

All saying the same thing.

M had the balls to call out the SELL.

UBS has since followed suit......

so again from this perspective, I find it so narrow minded to connect M to its structured warrants and then blame M for the fall.

Totally childish... which is extremely typical of i3.

If you wanna be a better trader, stay away from that forum. You will only end up losing focus.




BTW .... in June .... when Credit Suisse gave the ultra high (June standard lo) of rm23, TG was below 15.... every 1 loved that article. Stock soon burst out to new highs.... but do you know that in that very same report, Credit Suisse had already forewarned the risk of fy22 earnings to be drastically lower. The risk was there since June. Nobody cared. They only forecast on the high TP prices. Now? Got problem... all started blaming this and that....