GOLDEN RULE of Investing: Buy Low (Undervalue), Sell High (Overvalue)

Topglove is far undervalue based on the concrete data. Please refer to the below links.

https://www.malaymail.com/news/money/2020/06/11/top-glove-expects-another-record-high-performance-in-q4/1874619

https://research.sginvestors.io/2020/07/top-glove-maybank-kim-eng-research-2020-07-22.html

By referring to the news above, we can make an estimation on the coming ASP and calculate the Topglove's EPS in the next 4 quarters.

Est. ASP
march 30
April 33
May 36.3
June 41.7
July 48.0
August 57.6
Sept 69.1
Oct 82.9
Nov 99.5
Dec 119.5
Jan 119.5
Feb 119.5
March 119.5
April 119.5
May 119.5

ASP/USD Prd./b PBT in m PAT in m
Q4, 2020 49.12 20.52 1820.2 1383.4
Q1, 2021 83.88 20.52 4815.7 3660.0
Q2, 2021 119.46 22.49 8638.8 6565.5
Q3, 2021 119.46 23.28 8942.2 6796.1
Total 4Q 18404.8
EPS 6.82
EPS (70%) 4.78

EPS EPS (70%)
PE 20 136 96
PE 25 171 119
PE 30 205 143

The most important thing is if we conservatively cut down the EPS to 70%, it is still "unbelievable" GOOD.

No BUY or SELL call on the above sharing. All kinds of comments and sharing are welcome in this forum. However, please support your opinion with concrete FACTS. Wish you all have a nice weekends and Happy Investing.

Dear yttihs, please include me too. Thus, we can exchange the brief opinion base on solid facts without the nonsense yelling of sell, sell, sell, buy, buy, buy or run, run, run. Million thanks in advance.

I think we should share our thoughts based on the solid facts. Every moment shouting go up, up, up OR down, down, down is just meaningless. Hope my little sharing will be the starter of all of your invaluable and experienced comments and sharing. Let us make this forum become an useful resource for those who want to know more about the company. Wish you All the Best. Good night.

Implicit Information to estimate next Quarter's Revenue.

In the latest QR of Supermax, there is a column in the Current Liabilities Section, which is Prepayment received from customer. The amount is terribly huge, that is RM 892.37 million.

What is this number? Supermax had received deposit (20 - 50%) from its customers. Currently, they are operating "Just in time" distribution and delivery, which is about 45 - 60 days of delivery. This means the received prepayment will change into revenue in the coming quarter.

Now, please calculate conservatively, the prepayment is all 50% deposit and it will be double up to become RM 1.78 billions of revenue in the next quarter (most probably will be released in November).

Furthermore, the production will increase about 550 millions pieces of glove. With the log-in prepayment order, the increase ASP from USD 38 to USD 60, and the increase production; the Revenue will hit more than 2.5 billions and we just use the net profit margin around 50%,

The PAT of Q1, 2021 will be around RM 1.2 billions.

Lets us be more conservative and assume the Q2 - Q4, 2021 will have the same amount of PAT (RM1.2 billions), the 2021's PAT will hit around RM4.8 billions. In fact, the ASP is kept on increasing until December of 2021 which is not considered in the estimation.

Thus, EPS of 2021 will be around RM 3.53.

PE 20 = RM 70.59
PE 25 = RM 88.25
PE 30 = RM 105.90

Since Supermax will be included in MSCI started 1st of September, 2020, does the plunge of the share price currently indicate a fantastic precious time for a midterm investor?

No buy or sell call from the above sharing. Please do your own homework before investing. Do remember on the investing GOLDEN Rule, Buy Low (Undervalue) Sell High (Overvalue). Wish you ALL the Best and Happy investing.

By extracting the ASP from the previous quarter, we get the following table.

2020
Q4 Q3 Q2
Revenue 929,124 447,247 385,497
PBT 519,007 95,277 41,829
PAT 408,270 72,349 30,022
Op.Ex. 418,362 353,018 338,766
Fin Ex. 4,777 3,527 4,625
EPS 0.3002 0.0532 0.0221
Prod 5.725b(100%) 5.45b (90%) 5.45b (85%)

The calculated past ASP per carton
Q2 Q3 Q4
ASP USD/carton 19.813 21.710 38.641
Gross profit USD/carton 2.150 4.625 21.585
Cost USD per carton 17.663 17.085 17.056

Thus, by following Topglove, ASP July increase 15%, August 25% and Sept - Dec increase 10% m-o-m, the increase % per month and per Quarter as follows. The next two quarter will be maintained the ASP in Q2, 2021.

Month Inc. % Q inc. %
July 1.150
Aug 1.438 1.438
Sept 1.725
Oct 1.898
Nov 2.087 2.094
Dec 2.296

2021 Q1 Q2 Q3 Q4
Revenue 1451.10 2113.38 2113.38 2113.38
PBT 1006.99 1669.27 1669.27 1669.27
PAT 765.31 1268.64 1268.64 1268.64
EPS 0.563 0.933 0.933 0.933
ASP USD/carton 55.55 80.90 80.90 80.90
Cost USD per carton 17 17 17.00 17.00
Production (95%) in b 6.22 6.22 6.22 6.22

Then,

2021 total eps (RM) 3.36
PE 20 67.22
PE 25 84.03
PE 30 100.84

This sharing is purposely showing the future intrinsic value of Supermax since they have order book until August 2021. No buy or sell call from this sharing. Be steady, patient and wisely differentiate the fake vaccine news. Happy investing.

Dear Ninjavan1, this active de-toxify viral is used in the Phase III test currently. It will take about 6 - 12 months to see the efficacy of injection. There is still a long way to get the COVID-19 disappear and it needs clarification and approval from WHO. Be steady and Happy investing.

Please refer to the link as follows.
http://www.chinanews.com/gn/2020/08-06/9258051.shtml

By referring to the latest Hartalega investor's briefing report,

The sales volume is 9.1 bil pieces, the ASP increase is 5% and it reach around USD24 per 1000 pieces in Q1, 2021.

Report showed the ASP will increase 30% for Q2 and >30% for Q3. Besides that, the additional 5 - 7% production will be reserved for spot order.

Now, let us do a simple estimation for the financial year 2021 by making the below assumptions (Q1 as base).

1. Q2 = ASP increases 30%, increase 5% production for spot order which sold at USD60 per 1000 pieces.

2. Q3 = ASP increases another 30%, 7% production for spot order (compared to Q1) at USD80 per 1000 pieces.

3. Q4 = ASP increase another 30% and remain the 7% for spot order at USD80 per 1000 pieces.

4. The operating and financial expanses will be fixed at 655mil since there are 100% utilization in Q1 with (648 mil expanses)

5. Tax % is 24%.

New Estimation by 20200809 according to HARTAlega investor briefing
Revenue Rv 5% spot o. PBT PAT EPS
Q1 (base 24USD) 920.09 272.819 222.509 0.0649
Q2 (x30%) 9.1b 1192.46 114.66 652.12 495.61 0.1446
Q3 (x30%) 1550.20 214.032 1109.24 843.02 0.2459
Q4 (x30%) 2015.26 214.032 1574.30 1196.47 0.3490
2021 5678.02 3608.47 2757.61 0.8044

According to TA Sec. Anal. (0608)
PE40 32.18 30.80
PE45 36.20 34.65
PE50 40.22 38.50

This estimation is purely for sharing on the calculation of Hartalega future intrinsic value. No buy or sell call from this sharing. Please study the information by yourself and do your investment wisely. Happy investing.

Most probably HARTA will only rebound when the news of FDA approval on AMG is made by the company soon. For the time being, HARTA may be will drop back to its EMA 20 and sideline for a while. Hope everyone is steady in investment.

Dear All, what I have shared is just my assumption and it is not even a news. The purpose of sharing is to give a future intrinsic value on HARTA share price in the future 6 - 9 months. It was pity to see uncle and auntie had sold their share even during limit down price (~RM17.50) yesterday.

I am still holding tightly on HARTA, TOPGLOVE and SUPERMAX now because there is still a great demand on glove.

Hope everyone can understand the future intrinsic value of your company before invest into it.

NO buy or sell call from what I had been sharing. Wish you all the best in your investment.

From today QR, its revenue has increased 18.2%. Lets us make a simple assumption, with the approved AMG (beneficial to increase ASP about 20% -25% per quarter) and increased production capacity, the revenue will increase at a 30% rate for the next 3 quarter. We assume the expanses will remain RM650m throughout the financial year 2021.

Q2 Revenue 1196m PBT 546m PAT 415m
Q3 Revenue 1555m PBT 905m PAT 688m
Q4 Revenue 2021m PBT 1370 PAT 1042m

Thus, the total PAT for the year of 2021 is around 2366m.
The EPS will be about RM0.69.

Lets count with the normal PE 45, the share price will be around RM31
If the market sentiment is still optimist on glove sector (Since WHO has mentioned COVID 19 may be with human being for few more years), we can give PE50 to HARTA, where it will hit around RM34.5.

Thus, all the best in your investment.

Dear SimonJB, if HARTA mother share hits RM50, thus the intrinsic value for C53 will be [(50.00-23.88)/50] = RM0.52. Hope you get it. Wish you all the best.

C53 is the most expensive with the exercise price RM23.88 and the convert ratio 50 CW: 1 MS. If the mother share price hits RM50, it's value is only worth RM0.52. Be careful in the CW investment.

Let us do a simple conservative calculation on Topglove next four Q earning based on the prediction of increased ASP.

Earning 25USD 35USD 45USD
PAT(in b) 6.9 9.7 12.5
EPS (RM) 2.57 3.6 4.62
PE30 77.10 108.00 138.60
PE35 89.95 126.00 161.70
PE40 102.80 144.00 184.80

Do you think with the increased 20% m-o-m ASP which had been stated by Topglove management from Aug - Dec, 2020, the earning per carton will be just 35USD or much more than that?

Thus, we can make a brave assumption that Topglove TP will be at least RM100 in the middle of 2021.

Please invest based on your own judgement and risk management. All the BEST in your investment.

If we are doing conservative calculation, the PAT for year 2021 will 3.5 - 3.8 b. The eps will be around RM1.02 - RM1.1 based on the calculation of increased 10% ASP m-o-m.

IF we take PE50 for the uptrend HARTA share price, the TP will be around RM51 - 55.

Somehow, most probably the AMG was approved by FDA. If not, they will not create a new category of product. Just imagine, Topglove management had mentioned their ASP will be increased 20% m-o-m until Dec, 2020. With the AMG, if HARTA management just increased their ASP to 15%, the PAT for year 2021 will hit RM4.6 - 5.0b.

Then, the EPS will be RM1.34 - RM1.46. Then the TP will be around RM 67 - RM 73.

It is just a simple and rather conservative calculation. Please invest follow on your risk management. All the Best in investing.

Do remind, if we check on the inventories of HARTA last quarter result, we will get RM276m. Lets assume conservatively, they managed to clear half of their inventories, the earning will be RM138m + increased ASP on Q1, 2021.

Gaining from increased ASP:

138m / (22USD x 4.2) = 1.494 m cartons

Thus, 1.494m x 7USD (average for Q1) x 4.2 = ~RM 44 m

This will increase RM 138 + 44 mil for the next quarter.

Then, the estimated PBT for Q1, 2021 will be RM 550m - RM610m.

The PAT will be around RM420m - RM465m after minus 24% tax.

Lets do a simple predicted calculation on the HARTA 2021 financial year result.

Nitrile 96% (36.6 billion), thus nitrile 34.77 b, latex 1.83b
Thus, Q1, 2021 nitrile 35.82b, Q2 37.9b, Q3 39.47b, Q4 42.87
USD Inc. 5%/m Spot Ord. price Spot or. 10% Spot or. 15% Spot or. 20%
March 22
Apr 23.1 40
May 24.3 55 5.37 6.905 8.44
Jun 25.5 70
USD Inc. 10%/m Spot Order price Spot order 10% Spot order 15% Spot order 20%
July 28.05 80
Aug 30.855 85 14.274 16.981 19.688
Sept 33.9405 90
USD Inc. 10%/m Spot Order price Spot order 10% Spot order 15% Spot order 20%
Oct 37.33 90
Nov 41.07 95 24.463 27.1595 29.856
Dec 45.17 100
USD Inc. 10%/m Spot Order price Spot order 10% Spot order 15% Spot order 20%
Jan 49.69 100
Feb 54.66 100 37.194 39.461 41.728
March 60.13 100

Spot order 10% Spot order 15% Spot order 20%
RM ~mil eps RM ~mil eps RM ~mil eps
Q1, 2021 214.3827 0.062 259.703955 0.076 317.43684 0.092
Q2, 2021 568.03383 0.165 675.758895 0.197 783.48396 0.228
Q3, 2021 1013.832341 0.295 1125.584738 0.327 1237.337136 0.360
Q4, 2021 1674.232119 0.487 1776.277724 0.517 1878.323328 0.546

Add 110 mil for every quarter PAT
Spot order 10% Spot order 15% Spot order 20%
RM ~mil eps RM ~mil eps RM ~mil eps
Q1, 2021 324.383 0.094 369.704 0.108 427.437 0.124
Q2, 2021 678.034 0.197 785.759 0.229 893.484 0.260
Q3, 2021 1123.832 0.327 1235.585 0.359 1347.337 0.392
Q4, 2021 1784.232 0.519 1886.278 0.549 1988.323 0.578
PBT 3910.481 1.137 4277.325 1.244 4656.581 1.354
PAT 2971.966 0.864 3250.767 0.946 3539.002 1.029
PE 40
Mar, 2021 34.58 37.82 41.18
PE45
Mar, 2021 38.90 42.55 46.32
PE50
Mar, 2021 43.22 47.28 51.47

Thank you very much!

Dear Jack Khan, thanks on your sharing.

Dear All, please provide the ASP of Supermax's nitrile glove and latex glove. Is it about USD 30? Another question is what is the ratio of nitrile glove and latex glove production? Million thanks in advanced on your kind sharing.

Dear DK66, please add me too. Thanks.

To Lantern 42

According to the https://baohaiduong.vn/doanh-nghiep/doanh-nghiep-no-luc-vuot-bao-covid-19-134965

"The plant, with a total investment of about 2.2 billion USD, is in the final stage to connect to the 220 kV power transmission network and prepare to put into operation the No. 1 unit in the fourth quarter of this year as well as the whole. project in the second quarter of 2021. It is expected that the plant will provide 7.5 billion kWh of electricity to the national grid every year."

Wish you All the Best.

Dear Good Trade, please check and confirm the information before you post your comment.

According to the 1st quarter report, the section B3 (pg. 14) has mentioned "EcoWorld International recorded RM314 million sales in the first three months of FY2020. This is a marked improvement from the RM120 million recorded in the same period of FY2019. During the first
three months, the Group witnessed a recovery in demand for higher-end products in London as EcoWorld-Ballymore, the Group’s joint venture (JV) that focuses on the upper mainstream and lower prime segment of the London market, recorded RM246 million worth of sales in this period, significantly higher than the RM89 million recorded in the first three months of FY2019. The Group’s Australian sales, albeit from a low base, also improved to RM10 million."

Since the 2020 first quarter sales is about 2.7 times of the 2019 1st quarter sales, why is the profit is much more lesser?

Can anyone explain to me who are really confuse with it?