NST Business
KUALA LUMPUR: Rubber glove manufacturer Latexx Partners Bhd is being sold by its
Austrian-based parent Semperit AG.
In is understood that Latexx Partners, which was delisted from Bursa Malaysia in June 2013 following its takeover by rubber and plastic products maker Semperit, would be sold for about RM300 million.
Top Glove Corp Bhd and MQ Technology Bhd (MQTech) have emerged as the frontrunners to be the new owner of Latexx Partners.
Latexx Partners has manufacturing facilities at Kamunting Industrial Estate in Perak.
It was taken private by Semperit at RM2.30 per piece and its warrant at RM1.77 in 2013.
The takeover had then made Semperit the world's second largest rubber glove manufacturer after Top Glove.
Latexx Partners subsidiaries are Latexx Manufacturing Sdn Bhd, which manufactures rubber gloves, Medtexx Manufacturing Sdn Bhd, which is engaged in the trading of rubber gloves and letting of glove manufacturing plant and machinery, Total Glove Company Sdn Bhd, which treats and processes natural rubber latex examination and surgical gloves, and Worldmed Manufacturing Sdn Bhd, which trades rubber gloves.
Semperit, which was founded in 1824, is located in Vienna with its global R&D centre in Wimpassing, lower Austria.
The group employs around 6,900 people worldwide, including close to 3,600 in Asia and about 900 in Austria.
A source said Top Glove was the top contender to buy Latexx Partner, given the vast resources of the company which boasts some RM42 billion in market capitalisation.
Alternatively, a cash payout plus issuance of new shares of a much smaller company like MQTech could be a wiser choice for Semperit.
Amid the Covid-19 pandemic, the source said MQTech had been eyeing the medical gloves industry and it believed the sector would continue to be profitable in the long run.
"The Latexx Partners deal was also pitched to MQTech recently, and a positive outcome could be out within days," the source added.
MQTech is listed on Bursa Malaysia's ACE Market.
It manufactures products of rapid tooling, prototyping, jigs, dyes development, and other manufacturing solutions.
The company also manufactures high precision magnetic coils, coil assemblies, precision metal plates and jigs and fixtures used in the manufacture of hard disk drives, automotive and medical industries.
MQTech supplies goods and services to Asia Pacific and Southeast Asia.
PelhamBlackFund
Glove stocks continue to collapse after overheating and over optimism.
Topglove: Investors begin to question analysts FY21 earnings calculation for Topglove and drastic normalization in earnings after FY21.
Supermax: Investors begin to understand that higher OBM revenue does not translate to higher profit as cost is not well maintain.
The only sustainable glove stock is Hartalega.
- 51% of Hartalega's revenue are from US and medical healthcare. The worst Covid hit region and growing is US. No other glove companies have larger presence in the US.
- Many investors begin to understand that Topglove's ASP rise to US37/'000 gloves will be catch up by Hartalega. Hartalega's customers had reach out to Topglove to quote forward sales and noted that Topglove's ASP is higher, giving the chance for Hartalega to raise ASP to US$33 to US$35/'000 pieces.
- Hartalega is the only glove company in the world that able to produce Antimicrobial glove on a big scale. Once approved by FDA, this glove will be sold out for many years until FY2022 and beyond. This gloves are already sold in the Europe.
- World shortage is on nitrile gloves, not latex gloves. Hartalega produces 95% nitrile gloves. No other glove company produce as much nitrile glove as Hartalega.
- Next quarter earnings expected to be RM250mil- RM300mil, Q2'21 is expected to jump to RM500mil and Q3'21 is expected to jump to RM700mil.
- Not like Topglove who will be left with huge idle production lines post Covid, Hartalega will be able to maintain margin efficiency due to not expanding in a big scale in FY21.
- Harta's net profit margin is expected to fetch 35%-39% (vs Topglove of 23%).
- Foreign investment banks have upgraded Hartalega to between RM17 to RM23, while local investment bank lag due to wrong focus on Supermax.
2020-06-18 22:44