Glove Analysis

Cash
1. Supermax RM2.3 Bil
2. Harta RM1.6 Bil
3. Top Glove RM1.2 Bil
4. Kossan RM0.3 Bil (Based on Jun QR)
5. Careplus RM12.2 million
6. Comfort RM62.9 million (based on July QR)
7. Ruberex RM 76 million (Based on Jun QR)


Market Cap
1. TopGlove RM73 Bil
2. Harta RM62.7 Bil
3. Supermax RM26.6 Bil
4. Kossan RM19.2 Bil
5. Careplus RM1.97 Bil
6. Comfort RM2.42 Bil
7. Ruberex RM 1.85 Bil


Latest PAT
1. TopGlove RM1.4 Bil
2. Supermax RM0.79 Bil
3. Harta RM0.55 Bil
4. Kossan RM0.13 Bil (Based on Jun QR)
5. Careplus RM42.8 million
6. Comfort RM42.7 million (based on July QR)
7. Ruberex RM 22.9 million (Based on Jun QR)


Current Price
1. Harta RM18.28
2. Supermax RM9.78
3. Topglove RM8.91
4. Kossan RM7.52
5. Careplus RM3.68
6. Comfort RM4.24
7. Ruberex RM 2.30


PE
1. Harta 60.4
2. Supermax 20
3. Topglove 38
4. Kossan 62.3 (Based on Jun QR)
5. Careplus 24
6. Comfort 31.5 (based on July QR)
7. Ruberex 47.3 (Based on Jun QR)


EPS
1. Harta 29 sen
2. Supermax 47 sen
3. Topglove 22.79 sen
4. Kossan 11.96 sen (Based on Jun QR)
5. Careplus 15 sen
6. Comfort 13 sen (based on July QR)
7. Ruberex 4.7 sen (Based on Jun QR)


Current and Future Capacity
1. Topglove 85.5 Bil, aim to achieve in 2021, 105 Bil (+22.22%)
2. Harta 39 Bil, aim to achieve in 2023, 76 Bil (+94%)
3. Kossan 32 Bil, aim to achieve in 2022, 42.4 Bil (+32%)
4. Supermax 24 Bil, aim to achieve in 2022, 48.4 Bil (+101%)
5. Careplus 4.1 Bil, aim to achieve in 2021, 10.5 Bil (+156%)
6. Comfort 5.4 Bil, aim to achieve in 2021, 5.9 Bil (+9%)
7. Ruberex 1 Bil, aim to achieve in 2022, 3 Bil (+200%)


Profit Margin
1. Supermax 58.4%
2. Topglove 41.6%
3. Harta 40.5%
4. Kossan 18.7% (Based on Jun QR)
5. Careplus 34.9%
6. Comfort 21.6% (based on July QR)
7. Ruberex 26% (Based on Jun QR)

Supermax

Summary :- Despite having the lowest current capacity Supermax has the second highest Profit After Tax at RM0.79Bil much more than Harta and Kossan with higher capacity, Supermax able to achieve due to their highest profit margin at 58.4%! Even more crazy is that Supermax has the biggest capacity increase by 2022 with 85.5% more than current existing capacity compared to others only at 14.7% - 20.5% while at the same time having the most cash out of all big 4 with over RM2bil! Looking at its current market cap at only RM26.6bil , imagine the price it would be if able to double the market cap to RM53.2 bil market cap which is still below Harta current market cap of RM62.7bil! if that happens Supermax price would shoot up to RM19.56 !! which is equivalent to RM39.12 before BI!

Supermax currenly has the lowest PE among glove counters at only PE20 and FPE8. EPS over 30.. can you imagine how undervalue Supermax currently is? if you think its current price is too expensive you must be insane

2 scenarios in 2022 . If ASP continue to increase with almost double capacity increase Supermax PAT would hit over 2billion per quarter easily

if ASP maintain , or drop a little bit due to increase in supply or reduce in demand. lets say ASP drop to same level as previous quarter that gives supermax PAT at RM399mil with the doubled capacity it can easily maintain current PAT of RM789mil for many years to come



Careplus

Careplus closing price RM3.68 (reiterate buy with valuation of RM4.80 to RM6.00)

With completion of the price fixing of 2nd Private Placement (PP), the price should be heading up. No investor will take PP at RM3.60 if there is no potential of 20% upside at RM4.32. I know the investors mentality and expectation after evaluating Careplus..

Careplus at RM3.68 is currently trading at PE 14.6 based on our estimated FY 2020 EPS of 25.26 Sen. The YTD EPS was 14.97 Sen and Q3 EPS was 8 Sen. We projected Q4 EPS to be 10.29 Sen based on our financial modelling.

We reiterate buy on weakness or during correction with valuation of RM4.80 to RM6.00 based on forward PE 12 to PE 15 using projected FY 2021 EPS of at least 40 Sen giving an upside of 27% to 60%.

We expect Q4 EPS to improve further to 10 Sen due to

• Commissioning of additional 2 lines towards in Q3 to 29 lines and increasing the annual capacity to 4.62 billion pieces compared to 4.1 billion pieces at end of June. Increase in capacity of 12.6%. By end 2020, with additional 4 lines totalling 33 lines, the capacity will be 5.1 billion pieces based on corporate presentation below

• Further increase in ASP by 15% to 20% in Q4 with higher profit margin

• Higher Q3 gross profit margin of 38.6% compared to Q2 of 23.8%.


We have projected the FY 2021 EPS to be at least 40 Sen given the expansion of capacity to 5.6 billion pieces by end Dec 2020 compared to FY 2020 of 4.1 billion pieces, an increase of 36.6%.

FY 2021 the projected EPS of 40 Sen is supported by:

• 4 new lines to commission in Dec 2020 to increase capacity to 5.6 billion pieces compared till 30 June 2020 of 4.1 billion pieces

• Additional 15 new lines by mid 2021

• Softening of ASP in 2021 mitigated by contribution of new capacities to maintain the projected profit


Conclusion

Tier 1: Supermax
Tier 2: Careplus

DISCLAIMER

On prospects, its 12th factory increased capacity; ASP expected to increase in Nov n Dec; Capex spending on 5 new factories by end 2022 in US n UK. Construction commence by June 2021. We can expect they will spend a lot of money. And the trend now is smart factory which will cost a lot. They will get listed in SGX.

Supermax is also into making face mask. Phase 1 is 8 mil output. Mask production began in Canada; first batch shipped in Oct.

Careplus, only know they’re expanding; so will spend a lot of money there

any comment on windfall tax?

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https://pictr.com/images/2020/10/28/7Mj5dY.md.png

Windfall tax only applicable to commodity product.

not exactly.
Often does not mean the only ones.

for example, in UK, windfall tax is applied on utilities, and then for US, their banking industry.

This post has been edited by lamode: Oct 29 2020, 11:25 AM

Stop promoting. Can’t u see what’s the topic of this thread?

For business benefited excessively from covid19 economic recession, it is a fair game to tax them during covid19 economic recession.

This post has been edited by icemanfx: Oct 29 2020, 12:37 PM

for interested parties:



This post has been edited by AVFAN: Oct 31 2020, 09:16 AM

windfall taxes?
Don't think would happen anytime soon...
Why? Because it's effects many especially politician & their family.... Also royalties (if u know what I'm talking)

One of the many reasons why the previous 22mth government falls....

On another note...
Possibility of GST making come back...


As for gloves...
Good $$$ from previous rally...
Thanks Covid 19 💰🤑

This post has been edited by nexona88: Oct 31 2020, 11:39 AM

Gomen need to find additional tax revenue to cover budget deficit. Gst is one efficient tax, should be reintroduced at lower rate e.g 3%.

Don't think politicians or royalty are much vested in gloves plc, is a low hanging fruit to pick.

This post has been edited by icemanfx: Oct 31 2020, 12:29 PM

Yup. More tax likely... $$ needed to come somewhere to cover up all the sweets given previously 🤭

Not only glove but others sectors / type too...
One of the reasons why didn't agree to PM proposal of emergency.. it's would kill their side income 💰🤑

windfall tax possible during normal times but most unlikely at a time like now.

it will force the big boys to invest new outside (they are already); may kill the smaller/emerging ones.

why f a sector that is doing so well and now already paying super taxes to u?

kill the goose that lay golden eggs?

after killing this one, what else is there to pay hefty u taxes?!

Besides gloves, there aren't many industry the gomen could collect more tax. Windfall tax of 10% to 20% won't harm gloves plc. Lhdn is known to take fruits not the tree from tax payers.

This post has been edited by icemanfx: Oct 31 2020, 02:35 PM

Not true.. most companies getting audited are loss making companies to avoid paying tax.. first hand data from consulting firms..

i think below is a fair assessment:





This post has been edited by AVFAN: Nov 1 2020, 07:13 PM

I'm beginning to feel like the market is starting to realise the glove stocks are overvalued. The recent high Q32020 earnings of Supermax and Hartalega seems to have not boosted the share price anymore unlike in the past. Then there's a lot of profit taking activities on these stocks, especially the institutional investors. Plus insider action seems to show that the directors are starting to sell shares, like what was reported with TG.

Seems to me that these are the signs to exit as soon as I can. I made a small profit dealing with Supermax but am now at a loss position with TG and Harta. Now I'm waiting for the market to boost the counters one more time before I sell off my positions.

This post has been edited by Eurobeater: Nov 2 2020, 04:03 PM

If retailers could take profit, so could institutional investors and plc directors.

if retailers don't buy in bulk, price is unlikely to rise.

well, a sign that KYY is heavily promoting means Supermax sadly will holland soon....Harta seems well protected haha