Icon8888 Gossips About Stocks
(Icon) Supermax (4) - Heading towards RM3.36 ?
Few days ago, Top gloves announced a strong set of results. EPS grew by 44% y-o-y.
Yesterday, it was Comfort's turn. EPS also grew by 44% y-o-y.
As mentioned in my earlier article dated 24 November 2017, China's closing down of glove manufacturing factories has swung many glove users to source from Malaysia. This is a structural change that is likely to benefit Malaysian glove manufacturers for many years to come.
Due to Malaysia's unique position as the dominant gloves manufacturing country, our glove industry seemed to have strong international pricing power. This is evidenced by the fact that whenever cost goes up (either due to hike in latex price or the recent increase in natural gas, etc), Malaysian manufactures have always been able to pass the cost to users. This makes the industry very closed to the type liked by Warren Buffett - a moat that protect the producers from competition and unfavourable factors such that they can consistently make money over an extended period of time ?
Apart from pricing power, the glove industry also has plenty of room to grow. Even though Malaysian glove manufacturers had been growing for many many years (easily 10 years or more), only about 17% of world population use gloves extensively (mostly developed nations). Meaning that there are still 83% of the world market remained untapped. In this regard, we can expect the industry to continue growing almost indefinitely. It is a proxy to world economic growth.
Backed by the above favourable factors, I believe the market is rational to ascribe high valuation multiples to gloves stocks. Top Gloves, Hartalega, Kossan has PE multiples of 27 times, 52 times and 29 times respectively. For whatever reason, let's assume Supermax deserves a discount and as such, PE multiple of only 20 times. Based on EPS of 16.8 Sen (being latest Q EPS of 4.2 Sen annualised), the stock is potentially worth RM3.36.
A screaming buy at current level.
As for Stanley Thai and his little adventure, I believe he will eventually emerge unscathed (pay the fine but no jail).
Having said so, it is your money - your risk, your return. So don't blame me if things don't work out well.
Have a a nice day.
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Discussions
1 person likes this. Showing 22 of 22 comments
Icon8888....I trust you this round...since harta , topglove, kossan, all already breakout ...I believe this counter will follow to breakout soon...your tp is 3.36
For me I will do 100% careful prediction at 2.15 first to second is 2.25 and third is 2.85...if continue break out maybe will hit you tp next year ...at here I wish more to come...
2017-12-21 07:49
supermax is dirt cheap @rm2.08.
if I were Stanley, I just privatise it and enjoy all the fruits myself.
2017-12-21 09:02
Supermax PE 17x only now, compared to TopGlove PE 28x, Kossan PE 29x, Harta PE 52x.
if Stanley privatise it now, he can relist in Hong Kong/China/Singapore at PE >25x easily!
2017-12-21 09:05
icon8888 no more power now.
last time Bones & Icon can push up shares a lot, but now cannot. no influence anymore
2017-12-21 09:39
market cap also only 1.4b... so much less than harta and topglov and kossan..
2017-12-21 09:40
This time you really blew it! Haha!
Why you come up with this article is strange. Your behaviour is like KYY keeps on pursuing Xinquan.
First, Supermx is not growing. Doesn't justify PE of 20 at all.
Second, Supermx is a survival/victim. The Big Three are winners. When will Supermx being takeover? Probably not so easy! Because Supermx can't keep up with the speed of the Big Three.
2017-12-21 09:56
supermax is losing its position...long long time ago they were top 2 or 3...
political issue seems to be an overhang...we dont know what is happening behind the scene or if there are any (unseen) obstacles from u know who impacting their business operations...like it or not, business tend to do well if on the right side with those in charge
2017-12-21 18:02
Fortune
169 posts
Posted by Fortune > Dec 21, 2017 06:13 PM | Report Abuse X
VenFx comment on Dec 20, 2017
Stock: [ANZO]: ANZO HOLDINGS BHD
Dec 20, 2017 01:02 AM | Report Abuse
Go buy MIECO @ 0.920 early morning.
Xmast small gift for u .
21/12/2017 14:11
please explain to your comment above, mieco presently price at 0.825. you con every one in anzo to buy MIECO for you to escape from your contra dealing. bloody evil contra player VenFx aka fortunee
21/12/2017 17:25
venfx is a bloody puki mak conman
2017-12-21 18:46
icon.... you will start to loss your iconic title since you promote this lousy company with the director itself not sure about his own future.
Furthermore, i was told by insiders that their gloves production process really inferior and loss of competition compares with top glove, kossan and harta. Should omit out from the title Big 4.
2017-12-21 21:00
with stanley out of the mgmt. junior thai & his helmsmen will not chartered into new acquisition or directions. they went into a non related glove investment { doesn't sit well with funds manager )
2017-12-22 10:24
haha dont compare supermax with the big3 company they're so much better than supermax!
2017-12-23 10:00
Icon sifu was one of first to sailang HengYuan... his sense and analysis is good... only a matter of time to prove themselves... he didn't say this company can goto top 3 again, he only said improved earnings and EPS... so read carefully what he is targeting... turnaround and improved earnings play... plus they booked depreciation unnecessary, so that means they still have quite some money in bank to do acquisition, upgrade plants etc....
2017-12-24 10:44
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
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COMFORT : PE 15
LOWEST as compare v BIG 4.
2017-12-21 02:15