Well, better to feel a little behind compared to never to have found!

Scientex is about 10% of my holdings. If you look at the past 10 years, been solid growth in the same trajectory as QL. Of course, past performance is not indicative of future performance and all that. It is one of the few stocks that can exist in the same sentence as "capital appreciation" and "dividend".

The big insider buying suggests that the price may be near bottom at this point.

Today it dipped down to 3.95, that would be 11.85 pre bonus, my 6th sense tells me it’s fairly valued seems like there’s some homework to do this weekend..

Speaking of QL, it occupies approx. 12% of my stock portfolio, I’m not adding anymore position as it defies some of the quantitative metrics in my book, but I do not want to miss out such a solid company too..so there’s that

I know right. You'll be scrambling to justify that 60x PE for QL while thinking some comparable techs are overvalued. At least it is that way for me.
But it sure feels good to walk into Family Mart knowing you own a small piece of it. Just shopped there earlier today.

Wah... since when trader kopitiam corner change to BWC.. haha

Many comes and many goes

Ah boon gor, seems that you are doing very well with gloves and tech ya recently

This is CIMB coverage on Superman



1. Remember post #3603...

In Nov the TP was 13.20
In post #3603, the lowered it to 10.80
Latest, they up the TP higher to 11.80



2. Their earnings forecast they changed...

21F 3.231 Billion changed to 4.453 Billion
22F 2.286 Billion changed to 2.703 Billion
23F 1.598 Billion changed to 1.607 Billion (LOL! ... really? )

They increased the estimates all over

3. The declining earnings trend is the same, Superman is expected to earn much less money next FY.

4. They are basing the earnings on CY22 numbers. Be very careful... it's calendar year and not fiscal year.

CY22 numbers for Superman will effectively consists of the following quarters...

fy22 Q2, fy 22Q3, fy 22Q4 and fy 23Q1 numbers....

.... yup, so situpid. If they are gonna use CY, then give the readers the earnings tables based on CY and not FY.


5. The target price of 11.80 is based on 15x CY22F P/E..... which means their CY22 estimate eps is 11.80 / 15 = 78.6sen

With a share base of 2.721 billion shares, the estimate profits should be around 2.138 Billion.

6. Point 4. CY22 consisting of fy22 Q2, fy 22Q3, fy 22Q4 and fy 23Q1 numbers....

note .... fy 21 Quarterly profits aren't there. It's no longer used to calculate the TP.
Yup... what is important for the market is what the stock can earn in the future.

This post has been edited by Boon3: Feb 2 2021, 09:54 AM

... and this is Kenanga's writeup on Superman....

they lowered ..... the TP.






Estimates are raised higher but fy22 numbers are much lower....

And they are also using CY estimates....

Good read in the morning. Looks like the Q result forced them on an upward revision in terms of their numbers.
The drop off between 21F and 22F looks especially steep. I've read somewhere that the orderbook extends at least into 22F so maybe they know something I don't.

The last point in the most interesting one in this narrative because everyone seems to be in agreement that it will earn in the short term but will fall in the longer term. Exactly which point in time the drop will come and how steep seems to be the common area of disagreement. This particular report paints the view that the pandemic would be out of the critical zone by beginning 22F and done with by 23F.

There is a common blind spot too about Fundamental Analysis...

All data used in Fundamental Analysis are usually PAST figures , things that already happened....Be it EPS / cash flow etc

Yes, no doubt all these data are good for analysis purpose...those figures in balance sheet can help identify company with high debt...those figures in cash flow statement can somehow see the "style" of company in managing their cash..

Just becareful, dont buy into stocks because the PAST data ask you to buy.

Just keep it simple...yes the company is doing very well in the past 5 years, BUT can the company earn more in coming years?

This is why stock market investing is interesting we do not have any single formula that can precisely predict the future earnings...

For the glove cases, roughly one can estimate based on annual production volume & ASP...the main main / concern here is the declining ASP. (eventually in the future)...which lead to decline profit..Hence i'm not sure current share price is traded how many years ahead

Well.... exactly...

Incredibly, this was the view that the market had. They all had the same conclusion on their working estimates. Then MacQuarie had the guts to call it out last Sep.

It's a genuinely unique position. It's very hard to fanthom that the glove makers are making billions CURRENTLY and yet, the bear camp are treating them as if the glove makers are carrying a plague....

Earn so much... but price so low...

Hence.... ppl started looking for excuses.... the research reports... the call warrants... the shorties.....

Let's reverse the situation....

Say one was a buyer of .... errr... Superman.

Around end March or April .... that would have been the buying zone....

Now, at that time... was Superman's earnings very good?

The below screenshot... shows the current or trailing 12 months earnings for Superman. It was very really average. There was no boom boom earnings...



Yet... the stock soared ..... many bags could have been won! why?

Isn't it because.... due to the pandemic... the glove makers were PROJECTED to make mega bucks?

So based on what the stock is estimated in the future, the stock soared.....

Now... current earnings show big bucks .... but the future (?) ... the earnings is expected to decline.

See?

The one big misconception is 'ASP normalizing' .... cos I feel they think the ASP will fall straight back to pre Covid...

I believe they do not realise that .. a simple decline of a mere 20% in ASP .... would bring havoc to earnings.

Bulls seem to be trading 1-2 years ahead, bears are going 4 years on average.
But what's important is the trend, and that's down.

Yes, most seem to ignore or not know the fact that FA is used as a projection tool for future earnings.
It is more commonly used as a checkmark if a company has solid fundamentals, and then making a decision off that. I think this comes with the ambiguity of how to do the projections, so people never stray beyond calculating past formulas.

TA Research has one good estimate table.... you can download the whole file from Bursa website.

https://eresearchsystem.bursamalaysia.com/e...ad.pub?id=32845

On that table, they show their calculations + the average ASP (average ASP cos the latex and nitrile gloves sells at different prices) ....

I'm not in healthcare, so someone who is may have a better view on this.
I think normalize will mean falliing away from the hyper-demand levels in the pandemic, but will never be pre-Covid.
Medical infrastructure has expanded significantly in the Covid battle, and processes & safeguards tightened. Like in China, the average use of gloves went up even for non-Covid cases due to policy changes.

Maybe we can wait for our resident medical specialist to comment.

Yeah I agree, ASP wont drop a mere 20%, but I am slightly more optimistic, I think at least 10-20% higher than pre-covid.

I also think that the FY2023 numbers might not have included a full ASP normalization. Once we have the FY2024 numbers, we will know - if NP drops, means ASP will continue to decline further post 2023,

The TA report link... did you download it?

there's a lot of interesting points.

The table again...



1. It includes the production numbers ....

2. See the ASP estimates for fy21 and fy22. They are projecting ASP of rm284 in fy21 to fall/normalise to rm174.80.

That should be around 30% plus... I think.

3. The pre covid level is below rm90.

4. With the production numbers and the revenue of the past, clearly the ASP is the boom boom boom factor.

5. See the naughty CY numbers.... esp for 2019 and 2020. See how the CY numbers differ. (the CY numbers is higher _

Now for example, the fy22 estimate net profit is 3.888 (see page 1 of the report), the CY22 estimate is 4.262 Billion.


So by using CY numbers, we see that the profit numbers are much higher versus the FY numbers.




Lastly .... the ASP numbers. My arguments on the past is based on simple business practice. Cos I do not believe a business can jack up their Selling Prices for a long period of time. For TG, using TA numbers, we saw pre covid ASP of rm89 increasing all the way to rm265.00. For me, such alleviated prices can never last.....

The danger for you is that you might look for value once the glove stocks really fall......

mega value trap.



Do give it a real gooooooooooooooooooood thought.

Demand CAGR is still there, and my FA entry is even lower than JP morgan's price, I think if I can get it at my FA entry, it is quite safe already.

But IF ASP really drops to pre-covid level post 2023, I think even my FA entry is not an undervalued entry, but a fairly valued entry

This post has been edited by HereToLearn: Feb 2 2021, 11:51 AM

Okay. If you insist. I say no more.

Thanks for the advice though, if it can drop until pre-covid price, I really see no harm jumping in for long term.

the problem is that... it won't