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??

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...

Don forget kossan rubber.

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)

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...

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?

[quote=ahbeng97,Nov 23 2008, 01:15 PM]
Don't worry, even reach there the target can be reduce to RM2.50

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haha, 2.50? 5x P/E? if like tat i will invest all my savings lo...

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Thats is using EPS of previous year...I am sure this year and the following the EPS will be depreciate due to global slowdown... Don get too excited as it may slide even lower

[quote=ahbeng97,Nov 23 2008, 10:48 PM]
Thats is using EPS of previous year...I am sure this year and the following the EPS will be depreciate due to global slowdown... Don get too excited as it may slide even lower

[/quote]

I believe earnings should be quite stable la... gloves are mainly used in hospital.. even global crisis also need to use glove..

and investors are forward looking... they normally don;t look at P/E based on last year's earnings... normally ppl refers to forward P/E

[/quote]

Lol you are too optimistic then...If it is really so stable you won see the share price tumble so much already...from RM 7.00 till RM 3.6...

Don forget all the semi conductor industries... they are using gloves a lot....most of them are close shop already