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?

Guys, You can also Take Advantage of the COVID-19 Situation now,

The US FDA approved Malaysia's HWGB’s JV EBI to conduct Phase IV clinical trial for the prevention of COVID-19
#hwgbbiotech #covid19

News as per below for your reference
English: http://hwgbbiotech.com/news/view_news.php?news_id=88
Chinese: http://hwgbbiotech.com/news/view_news.php?news_id=89
Malaysia stock market https://www.bursamalaysia.com/market_inform...e-x0NoGXi85v85g

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

imagine if the gov imposing some crazy % of windfall tax on glove companies.

gg

I mean really crazy, like in the region of 30% to 50%

Then all the target price of everyone gonna sky dive.

This post has been edited by prozfromhell: Nov 2 2020, 07:42 PM

haha then the gov will see all the big dogs invest in other countries and slowly kiss byebye to M'sia...

Some of these big dogs already declared will keep substantial portion of earnings offshore.

All get big profit or bug losses?

Asp hasn't peak, higher profits to come.

How. I want to buy next dip.

If you believe price will rise than buy lor.

Wait carepls go down more as well

Gov is supporting our glove industry to maintain global leadership. Good?

how many of these incompetent companies trying to join the gloves bandwagon!

put more resources in profiting your company first before focusing on a totally different sector just because you saw a bigger pie that's being taken from someone

Baffling to see the angst on new comers to the glove manufacturing industry. Our existing glove companies cant meet demand. Orders r fully booked n paid high deposits until end of 2021. Factories running full swing on 3 shifts also cant expedite the delivery. And global glove demand is increasing by 15% after this pandemic.

Many of these new comers r not really new. Most of the new glove factories r managed by glove players n workers in the industry.

This industry should rightly grow. New comers r inevitable n ought to b welcomed. We dont become world leader in glove by chasing away a natural build up.

The gov can help this industry by helping to make/provide cheaper raw mats to the industry. Win win for all

All are short term opportunist

Glove companies like cash rich supermx can venture into tech already making high tech medical equipments.

This post has been edited by theberry: Nov 6 2020, 12:00 PM

it is true demand > supply now, esp nitirile... much less so for natural latex.



newcomers can find a place in the industry if they do all the right things and the demand stays strong after 2022.

won't be easy... cmco, foreign workers restrictions, nitrile supply shortage/cost rising, automation, FDA 510k/other certification, etc.

the big boys took >30 years; UG heatlhtcare, VIP gloves are very small ones - there are reasons why they struggled to survive for many years.

as investors, we do our homework, do our best to pick the "right" ones; big or small, old or new.

the big boys have a very big advantage - they now have RM1-3bil cash each on their balance sheet.

they have lots of opportunities and possibilities now - venture into other healthcare, automate further, launch more premium products or acquire other biz.

this is a rare and unique time for them - hope they don't waste it!

This post has been edited by AVFAN: Nov 6 2020, 01:30 PM

when and where there is excessive profit to be made, many new comers will join, and will end up supply>demand e.g bubble tea, white kopi, etc.

This post has been edited by icemanfx: Nov 6 2020, 03:56 PM

Big players have so much money now to expand further. Barriers to entry for new comers. Many don't realise the big players already had expansion plans in motion before covid happened. They had slowed down expansion plans due to supply glut + supply growing faster than demand pre-covid.

Big players say a factory takes 2-3 years to be fully operational from scratch. If true and big players' expansion were already, for example, 50% completed in December 2019 it may look like they expanded within 1 year only.

Plus when supply > demand, the weak will close shop. There was a consolidation in 2011-12 where many were pushed out of the market. This could happen again when demand falls and competition gets tough.

well said.

i will say BIG barriers to entry.

the big ones will pull further ahead while laggards and weak new entrants will wither.

the wild card in the PPE biz is how soon an effective vaccine will become available to 7.8 bil people on the planet.

assuming no other virus or bacteria will make new major threats.

No windfall tax. Glove counters gonna charge ahead

Rubber gloves production is not rocket science or proprietary, raw materials is not controlled items and new comers could poach experienced staffs from big players. hence, barrier of entry is not high.

instead of building from green field, one could shorten by leasing existing factory.

while money still could be made, many will join, supply > demand is later stage, few care at the moment.

If with windfall tax how much TG will pay?what about supermax?

no such tax.

big 4 will donate rm400mil to gomen to fight covid19.

Bearing cost of vaccine and health equipment? How does that account for?

meaning the 400mil is meant for all things fighting covid19.

tax deductible.

400mil... maybe that will help pharma cos. make some profit.

sounds very fine for me.

if u hold any big 4 glove, u shud feel good about next week.

Yes. I misread that 400 million is just for government while the vaccine and health equipment separately accounted for.

That's good news. Tax deductible some more.

Not bad la just some ant bite instead of a crocodile bite. Haha

True. But which existing factory will lease to new players, especially when they can enjoy crazy profits currently? Any sane person would want to keep all profits for themselves.
Even those factories that were in trouble pre-covid are happily raking in the money.

Big players can secure raw materials by paying higher prices with big cash reserves currently. New comers do not yet have the same cash flow, unless pumped in externally somehow.
But raw materials are also facing bottlenecks at the moment, which has impacted the maximum potential of even the big players.

Still waiting to see how this all plays out, whether the new comers able to survive or not.

can anyone confirm?

Consider this. Many of the big 4 already have operations outside of Malaysia. TG chairman has mention tax in Thailand is 8% compared to Msia's 10%, but he's still in Malaysia.

Vietnam has been trying to pull manufacturers over in recent years. Via government relations as well as targeted approaches.

If windfall tax on gloves will be introduced, what do you think will happen? Will our govt risk the loss of exports, tax and contributions to local economy (supply chain etc.), for this short term gain?

Also consider 1 factory able to employ how many people.

https://www.theedgemarkets.com/article/top-...t-fight-covid19

TG figures don't tally with that. But close.

Voluntary, or deal to stave off windfall tax?

This post has been edited by knumskul: Nov 6 2020, 07:13 PM

yea, close enough!

gotta be a negotiated deal.

both sides seem smart.

if one side force their way, bad for all...

Lease existing vacanr factory to install new line.

Most of new comers are not financially weak either. Let see asp from h2/21.

this should be real:



kossan 50mil?

the smaller players not in this thing, i wud think.

Actually it doesn't take long if you want to speed things up. However the real headache is to get cheap power for your boiler and oven. You have to get through Petronas for natural gas supply. I'm not sure if they still get discounted rate or not, but still need to get the nod for uninterrupted supply.

At current elevated asp, paying extra for heating is marginal.

The bottleneck is the manpower availability, especially in current covid operating environment.

Power costs will be passed into selling prices.

They are in the construction business. Manpower is easy for them to get despite the red tape unlike SME.

RIP my beloved glove counters...

https://www.theguardian.com/world/2020/nov/...pfizer-biontech

Bad news for Glove stocks ?

Yea looks like it.. Mercator already holland..any FF in gloves will consider selling down..KYY also hahaha ah fug la can't catch a break with gloves...ah well...

RIP

EPF baru topup TopGlove. Think glove gonna limit down?

won't limit down la..but I'm guessing it will go very very red...add in the IBs and their usual game...

Luckily I buang Harta just yesterday, but my holdings in TG RIP lol

lol gloves straightaway down 10% at open this morning

dont worry TG have EPF

I feel hilarious when vaccine not even confirmed of 100% safety can bring so much optimism.

I know it's a breakthrough but normal vaccine needs 10 years to be approved.

People worried about distribution when it's not even approved or proven 100% safe.

Hahahahahaha

you are talking about the hype, the euphoria.

market always react on the slightest thing.....

since when epf holding guarantee price won't drop?

This post has been edited by icemanfx: Nov 10 2020, 10:26 AM

Won't guarantee, but at least institutions won't panic sale like heavy retailers counters


This post has been edited by yehlai: Nov 10 2020, 11:19 AM

Not low enough. If u bought at high price, should avg down. Sell the portion when it goes up n u get lower pricing

Yeah, but I only have a relatively small amount in gloves compared to the rest of my portfolio. Only few k compared to the others at tens of thousands. I masuk to speculate a bit je and not very worth to buy just a few lots to keep average down coz of the brokerage charge

ok la Msia glove stocks down 7-8%... seems like others worldwide down 15%?

Unker KYY new post

Fuhhhhh glove blood red.

Hopefully rebound in a few days

Crazy how the market sentiment thinks that gloves will be non existant just because a vaccine is 'effective'.

Can't imagine if the windfall tax passed through. Would've definitely crushed glove counters.

Better take this opportunity to buy some more kek.

BBB UUU

PPE GLOVE TO THE MOON~~~~~~

Whenever there are news of vaccine, always standby to grab some gloves counter if the price suits you. As these counters are quite volatile, you can make 8-10% gains in 2-3days.

Today u can login ur goreng acc n grab some top glove n careplus

some good info and glove data in this global research report - players, types, forecasts...



This post has been edited by AVFAN: Nov 15 2020, 11:34 AM

There is no doubt that the gloves sales will still continue to go up, even with the vaccine rolled out. In fact, more gloves might be needed too I'm guessing

Problem is whether the current price is good for entry or not only. To me, I believe it's still overpriced. But since there was a purge just last week, there may still be chances for the stock up go up again one more time.

both my Supermax and TG at around 10% paper loss.

Can I buy today to average out?

Nobody know when it will reach lowest point. Just keep watching. Either u buy some whenever u feel it’s worth it or u wait for the signs it is surging

new Moderna test results came out at 94.5% effective, i think once an actual vaccine gets delivered to the public, glove stocks are done.

If have extra funds continue to collect, once the hype is over it will go back up. Gloves counter will not die.

This covid has changed the SOP of health departments in a lot of countries, therefore gloves demand will not reduce in future. Only concern is new players coming in and taking part of the market share.

SOP change or not, business as business - glove company order already full taken until end of next year so it is still a money making business full year ahead
even if vacinne came out, I don't healthcare personal provide care and vacinne without glove anyway

current down trend just another goreng game manipulate by certain parties, if not how they make money from the stock market?

Will hold my Supermax and Topglove
Will hold my breath

Are you guys gonna average down still? I'd stay away for now till theres some positive sentiment coming back in.

Just did. The gloves seem to be rebounding slightly. Not sure why, but definitely is not restricted to TG alone.

I forsee maybe one or two positive sentiments about these stocks will come in over the next few weeks or months, which should push prices back to the original target prices set just last month. Once that happens, I'll close all my glove position and exit entirely. It's time to stop speculating lol

Likely topping up to avoid margin call.

U will then witness in disbelief all the glove counters blast off w falcon heavy rocket boosters

We shall see lol. For me better to miss opportunity than to lose money

Morderna vaccine is really game changer...
It's easier to have it's storage... Normal chilling is enough.. no needed extremely special cold storage...

Glove glorious days are numbered... Watched out

TBH their manufacturing process doesn't feel that sanitary either, they didn't have mask back then.



See this, even during covid their masks don't fully cover their nose. I won't be surprised if their gloves are tested positive for covid abroad, it's going to be scathing for Top Glove.