I studied her financial statement found this counter is jet-speeding in growth from the past 6 years.

1) Sales 44%
2) Profit after tax 39%
2) EPS growth 34%
3) Nett Assest 32%
4) Cash grow 60%

People suggested that her fair value should be around triple of current price at RM4 which is about RM12+. Is it too good to be true ? How come the transaction volumn is so low ? I think it is neglected.
What all sifus comment here ?

This post has been edited by rayloo: Nov 16 2008, 02:38 PM

Brother,
Cannot be too optimistic when you do investment. Try not to beliv on what ppl told you. If it is so good will ppl want share with you?

I know this counter has a good business.. It has about 25% of the global market share. The EPS is 40 sen last year...
Most of the our rubber are imported from Thailand which is the largest rubber exporter if i am not wrong. What will happened if their competitor have build their factory at thailand ? Will their competitor have a lower cost in raw materials? Thus higher profit margin...For me at current price it still consider expensive...with EPS of 40 sen last year..I beliv EPS for this year will be go down a lot as most of their gloves are expoted to Europe especially US....

US now is slowing down and some factory is closed down even... Where is their demand? Futher more this stock is 100% growth stock thus if you are holding now you will not having any dividend at all and without dividend...

Consider that... will it be better to put your money in FD??

I think whether market recession will bring minimum impact to glove usage, we cannot use a same pair few times. Now people especially the rise of developing countries like BRIC have more awareness to hygine and the increase of diseases only create more demand. It is not like other products such as vehicle or computer or cloth which we can save by avoiding upgrade and use old one.

I don know that most rubbers are imported from Thailand, but take palm oil as an example, Indonesia and Thailand also has palm trees. But they rate our palm oil quality is the best. And many people like me will not bother China goods which are lots cheaper but poor quality, so I believe if their competitors stand some factories in Thailand and have advantage of lower cost, at least they must run double faster to challenge Top Glove.

From my calculation I also think that the price at RM4 is under value, where the average PER for the past years was about 16, considering the growth of the EPS at 34% you can forsee its value in future. Even I give it the minimum growth which I can accept at 15, the price now is still 30% lower from its value.

I beg you all sifus to raise different opinions so we can see from various angles. And please correct me If I am wrong.

This post has been edited by rayloo: Oct 5 2008, 11:27 PM

How about retrenchment? Less workers = less gloves used
How about company bankrupt = They don need to use gloves anymore

The target price is during economy boom where as for now i belive the global economy will slump for quite some times... maybe 5 years or more...


Basically you must know why pppl buy certain stock for...why not they put into FD since the risk is higher compare to FD...Have you ever think about this?

There are two types of stock

1. dividend stock
This type of stock will give annual dividend of about at least 5% which is better then putting into FD. Normally this type of counter will have lower risk...as their earnings are mostly predictable....Eg. Amway, nestle, public bank, JTinter... thats y you can see their share price is solid like rock as the investor can still get dividend during slowdown but the dividend might be lower ...

2. Growth stock

This type of stock will get the bad hit during slowdown....As the words growth implies....
These type of companies need to continue expand their business in order to maintain their competitiveness...
If they grow their business by creating more production line of glove making... certainly their market value will go up...thats y it is booming for the past few years during economy is good
During slowdown = slow down in demand....What is the reason they expand their business? No demand bar....


Take for example


DURING MARKET BOOM

Gloves total demand maybe 3 billion....With annual productoin of 200 million then top gloves will have a lot of room to grow....

DURING SLOWDOWN....

Glove total demand may erroded to 1 billion...With annual production of 200 million will be more than enough....

So... with out dividend and without capital appreciation on this counter ... ithink it is too early to enter this counter...

Hmm....making sense...O.K, keep an eye on it.
Thanks darkknight81. Your analysis is pro.

They might built plants in Thailand or China liao, nowadays Malaysia just another small fish in the pond

This post has been edited by htt: Oct 6 2008, 02:35 PM

Yup, looking at past trend suggest this company had growth at a rapid rate. Since listing in 2001 till 2007, its share price alone had risen by 3000%. Beginning 2007, its share price head south from high of 9.64 (adjusted price) till now around 4.00. Stiff competition by local (Supermax, APLI, Hartalega, Adventa etc) & foreign rubber glove company coupled by rapid increase in commodity price (rubber) may be a reason.

Don forget kossan rubber.

Top Glove already have factories in Thailand & China.

Total productoin = 30 billion pcs per year with 338 prodction line

Malaysia contributed 77% earnings
China contributed 5% earnings
Thailand contributed 12% earnings

Factories in malaysia = 13
Factories in China = 2 (Advantages - cheap labour cost)
Factories in Thailand - 2 (Advantages - cheap raw materials)

With latex & fuel price erosion, would it grow? Worker might get retrench but hospital won't stop using glove, at least the business should maintain, right? But entry barrier into the business is relatively low and stiff competition might kill

Notice that the transaction volumn was also low even when market was good in this counter. Why huh I wonder ? No one to goreng ?
This is supposed to be very good corp. Really wonder why it does not catch much attention.

First, this type of counter cannot goreng one.. you got to see the market capitalization.... Only cheap without strong fundamentals can be goreng.

Besides, almost 60% of top glove stake is own by the directors...

Hmm.....this is news to me. Not detail enough I study.

yo Rayloo,

did you compare TopG with Kossan? i did some study and both of them looks impressive too.

Full year result out.
Proposed final dividend 6 cents.

I think they are confident with their operation, hold much share possible to gain max benifit !

Sorry the director Lim Wei Chai. He himself holding almost 60% stake. How much salary per month for him? Since he is the largest shareholder i beliv his montly salary is talking about million. We as the small ant cannot benefit at all..We expect for the 6 sen dividend?

This post has been edited by ahbeng97: Aug 1 2009, 11:24 AM

Trend now is switching from natural rubber to synthetic nitrile gloves to avoid the protein allergy problem.