https://www.thestar.com.my/news/nation/2024/10/09/govt-considers-ending-chicken-egg-subsidy-says-mat-sabu

After series of improvement in plant efficiency with more automated, many Malaysia glove maker already can almost breakeven even selling at low selling price USD 18-19/1000pc. Therefore, any hike in ASP above these level is PURE profit

Top glove is world largest glove maker with capacity 100 billion is prime beneficial as it will intensified to fill China market share gap in US

The importance massage is next year onward, cheap China glove USD 17/1000pc can't compete with Msia glove maker in US as 50% tax level will sent USD 25/1000pc in 2025 and more tax 100% next in 2026

These is possible as Topglove record Q3 revenue RM 636.8m, but the, operating expense record RM 671.1 m, resulted operating loss RM 34.3m. It make sense as topglove record operating expense ahead before shipment. As shipment delay and only booked in subsequent quarter, therefore, revenue collected in upcoming Q4 will be record as full operating profit (to offset Q3 operating loss)

USD 20/1000pc,
500m = USD 20 x 500k = USD 10m
Assume average exchange rate RM 4.5 during July-spt, USD 10m = RM 45m
As Topglove operate at slim profit margin, revenue almost equal to production cost, therefore if delay shipment 500m pc already fully account in Q3 as production cost, but, collection only booked in Q4

💪

💪

Soley based on shipment delay in 3QFY24 estimated at 500m pieces had already been shipped and will be booked in 4QFY24 will give topglove boost up revenue by RM 45m.

If these shipment delay cost have been booked in 3QFY2024, upcoming 4QFY2024 will purely book these RM 45m as 'extra profit'

Lets breakout RM 3.00😁

💪

Top glove continues to see MoM uptrend in sales volume in Sept 2024 and expects customers’ replenishment activity to pick up in subsequent quarters, underpinned by inventory rebuilding by distributors, indicating that demand recovery had further gained momentum. Presently, its sales volume had strengthened 25%-30% MoM, bringing utilisation rate to 65%-70% vs. our assumption of 55% in FY25 (based on 64b pieces capacity) compared to 45% in 3QFY24. Recall, it has previously highlighted that the bulk of a shipment delay in 3QFY24 estimated at 500m pieces had already been shipped and will be booked in 4QFY24.

2. It is optimistic that ASPs are expected to inch up gradually, potentially by 5%-15% or USD0.80 - USD1.50 per 1,000 pieces due to the uptick in demand and mitigation against the appreciating MYR against USD.

https://www.businesstoday.com.my/2024/08/20/ncia-secures-rm31-38-billion-in-penang-investments-for-h1-2024/#:~:text=The%20Northern%20Corridor%20Implementation%20Authority%20(NCIA),%20together%20with%20the%20Malaysian

Why US 115 billion or RM 492 billion is possible by 2030, cumulative 6 year period translate to about 85 billion per year.

Just first half 2024, Penang already secure RM 31 billion investment.....

GEORGE TOWN: The Northern Corridor Implementation Authority (NCIA), in collaboration with the Malaysian Investment Development Board (Mida), has secured RM31.38 billion in investments for Penang during the first half of 2024.

NCIA chief executive Mohamad Haris Kader Sultan said that this substantial investment demonstrates strong investor confidence in the long-term prospects of the Northern Corridor Economic Region (NCER), particularly in Penang

NCIA and Mida secure RM31.38 billion in investments for Penang

Penang is looking to attract US$115 billion (about RM492 billion) in investments by 2030 by tapping into the front end. However, it needs to upgrade the current infrastructure to meet the rising demand for water and electricity first.

A massive overhead power transmission line is expected to be ready by the end of the year to help meet the growing electricity demand. This new transmission line, part of a 275 kV project, will deliver a capacity of 2,000 MW from the mainland to Penang Island.

Currently, the island’s peak demand is around 800 to 1,000 MW. The new capacity will also support upcoming developments, such as Silicon Island and the industrial area expansion.

Besides needing more energy, the state is tackling a critical water shortage. The spike in water demand between 2019 and 2023 has strained resources, coinciding with the semiconductor boom.

The state has committed RM1.18 billion to water infrastructure projects to address this issue and ensure a stable supply until 2030. A stable supply of water and electricity is vital for the semiconductor industry, as even brief outages can lead to millions of dollars in losses.

KWP accumulate more harta share

KWP accumulate more topglove share

major shareholder accumulate more kossan share

breakout RM 2.00

Beware, major shareholders continue trim down his stake

Malaysia’s gloves export volume surged 66% MoM and 105% YoY in Aug, outpacing the growth in July (+12% MoM; +43% YoY). The latest export volume is even 34% higher compare to pre-pandemic 2-years monthly average number indicating that the recovery momentum of global gloves demand remains healthy.

Malaysia’s gloves export volume surged 66% MoM and 105% YoY in Aug, outpacing the growth in July (+12% MoM; +43% YoY). The latest export volume is even 34% higher compare to pre-pandemic 2-years monthly average number indicating that the recovery momentum of global gloves demand remains healthy.

USD strength further to RM 4.27 due to global tension and fed hint no rush to cut rate.

topglove earnings recovery is strongly supported by increase volume loaded, plant utilization rate and higher ASP forward

USD strength further to RM 4.27 due to global tension and fed hint no rush to cut rate

War in fact will spur higher demand for healthcare, glove is needed

healthcare services are often considered defensive, increase volume sold, plant utilisation and ASP hike are main catalyst to propel earning recovery back to prepademic earning.

Better invest in defensive healthcare related stock, glove is essential and stiff China competition is easing due to upcoming 50% tax levy in 2025 and 100% tax levy in 2026

ASP gradually to increase 20% from current USD 19/k to USD 23/k

US port workers and operators reach deal to end East Coast strike immediately
https://theedgemalaysia.com/node/729015

https://www.thestar.com.my/business/business-news/2024/10/04/ringgit-weakens-against-the-greenback

https://www.thestar.com.my/business/business-news/2024/10/04/recovery-in-sight-for-top-glove-despite-challenges

Top glove always follow its rule to announce date of release Q result by given 1 week ahead notification in bursa. These practices is also similar happen to SUNWAY and SUNCON

ASP gradually to increase 20% from current USD 19/k to USD 23/k

Utilities stock particular PBA is safe heaven in time of market volatility due to essential water, while still enables investors to enjoy both dividend yield and EPS growth due to water traffic rate hike and unstoppable increase water consumption

Indications are pointing to a strong demand recovery moving into 4QCY24 and CY25 that will exceed our previous assumptions, underpinned by inventory rebuilding from distributors. Specifically, there has been uptick in orders over the past two quarters. The rise in demand comes as the inventories of major distributors across all regions have returned to normal levels. Case in point - HARTA expects to hit sales volume of 2.2b pieces/month in 2HFY25. Already, HARTA has seen 1QFY25 orders hitting close to 2b pieces per month compared to 1.5b-1.8b pieces per month in 4QFY24 and 3QFY23. TOPGLOV is optimistic that the strong growth momentum will sustain, as customers continue replenishing their depleting glove stockpiles. The group continues to see MoM uptrend in sales volume in June 2024 and expect customers’ replenishment activity to pick up in subsequent quarters, underpinned by inventory rebuilding from distributors, indicating early signs of potential recovery in demand. It has seen sales order rising 25%-30% MoM. Tell-tale signs of predatory pricing by certain overseas players (i.e. selling below cost over an extended period of time to eliminate competitors) have diminished. Specifically, glove players under our coverage have seen their ASPs rising over the past two quarters, potentially implying demand is on the path to a recovery boosted by order replenishment.

Indications are pointing to a strong demand recovery moving into 4QCY24 and CY25 that will exceed our previous assumptions, underpinned by inventory rebuilding from distributors. Specifically, there has been uptick in orders over the past two quarters. The rise in demand comes as the inventories of major distributors across all regions have returned to normal levels. Case in point - HARTA expects to hit sales volume of 2.2b pieces/month in 2HFY25. Already, HARTA has seen 1QFY25 orders hitting close to 2b pieces per month compared to 1.5b-1.8b pieces per month in 4QFY24 and 3QFY23. TOPGLOV is optimistic that the strong growth momentum will sustain, as customers continue replenishing their depleting glove stockpiles. The group continues to see MoM uptrend in sales volume in June 2024 and expect customers’ replenishment activity to pick up in subsequent quarters, underpinned by inventory rebuilding from distributors, indicating early signs of potential recovery in demand. It has seen sales order rising 25%-30% MoM. Tell-tale signs of predatory pricing by certain overseas players (i.e. selling below cost over an extended period of time to eliminate competitors) have diminished. Specifically, glove players under our coverage have seen their ASPs rising over the past two quarters, potentially implying demand is on the path to a recovery boosted by order replenishment.

bought harta at 2.81

Bargain Hartalega & Kossan
Hartalega will need convincing strength above the 100-day ma (RM3.06) to fuel further upside towards RM3.30, the 123.6%FP (RM3.43) and 138.2%FP (RM3.68) ahead, while downside risk is capped by the 76.4%FR (RM2.66). Kossan need a confirmed breakout above the 200-day ma (RM2.06) to enhance upside momentum towards the 100-day ma (RM2.19), RM2.33 and 123.6%FP (RM2.42) going forward, while the 61.8%FR (RM1.79) and lower Bollinger band (RM1.71) cushions downside.

Bargain Hartalega & Kossan
Hartalega will need convincing strength above the 100-day ma (RM3.06) to fuel further upside towards RM3.30, the 123.6%FP (RM3.43) and 138.2%FP (RM3.68) ahead, while downside risk is capped by the 76.4%FR (RM2.66). Kossan need a confirmed breakout above the 200-day ma (RM2.06) to enhance upside momentum towards the 100-day ma (RM2.19), RM2.33 and 123.6%FP (RM2.42) going forward, while the 61.8%FR (RM1.79) and lower Bollinger band (RM1.71) cushions downside.

Fed Chair Jerome Powell hinted the central bank is not in a rush to rapidly cut rates.

Better invest in defensive healthcare related stock, glove is essential and stiff China competition is easing due to upcoming 50% tax levy in 2025 and 100% tax levy in 2026

Fed Chair Jerome Powell hinted the central bank is not in a rush to rapidly cut rates.

Better invest in defensive healthcare related stock, glove is essential and stiff China competition is easing due to upcoming 50% tax levy in 2025 and 100% tax levy in 2026

healthcare services are often considered defensive, increase volume sold, plant utilisation and ASP hike are main catalyst to propel earning recovery back to prepademic earning.

healthcare services are often considered defensive, increase volume sold, plant utilisation and ASP hike are main catalyst to propel earning recovery back to prepademic earning.

It need to breakout RM 2.60 to resume uptrend toward RM 3.00 and thereafter before next upcoming Q3 EPS 15sen

Very funny, what so happy about strength in RM? Go check whether if there is any consumer price decrease in the market? Check whether properties price decrease? Check whether any car price decrease?

In contrary, when RM on weakness, all price increase effectively to so call reflect increase input cost, so happy so what. Bursa mostly down as most companies is exporter, only small fraction is net importer, so, their earning will be lower next.

Newest but emptiest mall in Selangor? Why like this? KSL Esplanade Mall Walking Tour [4K]
https://www.youtube.com/watch?v=X8tIxEWCy-Y

ESSB foreign translation gain RM 147m mean ESSB have big exposure in USD account during April-july period. These translation will become loss as USD exchange rate tumbling after July from RM 4.70 to RM 4.12 now. ESSB export 83% of its product in USD denominated

https://www.thestar.com.my/business/business-news/2024/09/30/soft-steel-prices-a-challenge-for-hiap-teck

Additionally, the scheduled completion of ESSB’s hot rolled coil plant – expected by the fourth quarter – will enhance the group’s product offerings in both domestic and export markets.

Remark: HLB research failed to recognized that HRC selling price is at multiyear lowest level, HRC product price is in severe winter
https://htgrp.com.my/wp-content/uploads/2024/09/Analyst-Presentation-4QFY24_31-Jul-2024-Final.pdf

https://www.thestar.com.my/business/business-news/2024/09/30/soft-steel-prices-a-challenge-for-hiap-teck

HLIB Research said the results had beat its expectations. The showing accounted for 114.5% of the research firm’s estimate, due mainly to a better-than-expected contribution from joint-venture firm Eastern Steel Sdn Bhd (ESSB).

Remark: Extreme bias HLB research to omit ESSB profit is mainly due to UNREALISE foreign translation gain RM 147m, which could reverse in next Q result due to significant weakness in USD currency.

Next month topglove will likely record maiden turnaround profit

Topglove highlight
1. The Group is optimistic that the strong growth momentum will sustain, as customers continue replenishing their depleting glove stockpiles. The group continues to see MoM uptrend in sales volume in Sept 2024 and expects customers’ replenishment activity to pick up in subsequent quarters, underpinned by inventory rebuilding by distributors, indicating that demand recovery had further gained momentum. Presently, its sales volume had strengthened 25%-30% MoM, bringing utilisation rate to 65%-70% vs. our assumption of 55% in FY25 (based on 64b pieces capacity) compared to 45% in 3QFY24. Recall, it has previously highlighted that the bulk of a shipment delay in 3QFY24 estimated at 500m pieces had already been shipped and will be booked in 4QFY24.

2. It is optimistic that ASPs are expected to inch up gradually, potentially by 5%-15% or USD0.80 - USD1.50 per 1,000 pieces due to the uptick in demand and mitigation against the appreciating MYR against USD. However, due to the lag impact, ASP increases will only be felt gradually starting from Nov-Dec CY24. We believe predatory pricing by certain overseas players (i.e. selling below cost over an extended period to eliminate competition) have diminished as Chinese players’ utilization hit >90% While TOPGLOV is silent on existing ASP, we estimate every USD1 change impacts earnings by below 2%. We conservatively assumed ASP of USD20/1,000 pieces in our earnings model.

3. The group highlight that its exports to the US is continuing to show improvement which currently accounts for 28%-30% of its geographical sales mix. As an indication, TOPGLOV has seen its volume sales from the US market raising 20% YoY to account for 15% in 9MFY24 compared to pre-pandemic average of 20%-30%.

Topglove highlight
1. The Group is optimistic that the strong growth momentum will sustain, as customers continue replenishing their depleting glove stockpiles. The group continues to see MoM uptrend in sales volume in Sept 2024 and expects customers’ replenishment activity to pick up in subsequent quarters, underpinned by inventory rebuilding by distributors, indicating that demand recovery had further gained momentum. Presently, its sales volume had strengthened 25%-30% MoM, bringing utilisation rate to 65%-70% vs. our assumption of 55% in FY25 (based on 64b pieces capacity) compared to 45% in 3QFY24. Recall, it has previously highlighted that the bulk of a shipment delay in 3QFY24 estimated at 500m pieces had already been shipped and will be booked in 4QFY24.

2. It is optimistic that ASPs are expected to inch up gradually, potentially by 5%-15% or USD0.80 - USD1.50 per 1,000 pieces due to the uptick in demand and mitigation against the appreciating MYR against USD. However, due to the lag impact, ASP increases will only be felt gradually starting from Nov-Dec CY24. We believe predatory pricing by certain overseas players (i.e. selling below cost over an extended period to eliminate competition) have diminished as Chinese players’ utilization hit >90% While TOPGLOV is silent on existing ASP, we estimate every USD1 change impacts earnings by below 2%. We conservatively assumed ASP of USD20/1,000 pieces in our earnings model.

3. The group highlight that its exports to the US is continuing to show improvement which currently accounts for 28%-30% of its geographical sales mix. As an indication, TOPGLOV has seen its volume sales from the US market raising 20% YoY to account for 15% in 9MFY24 compared to pre-pandemic average of 20%-30%.