If use 48Bln with same assumptions - TP changes a lot.

Kenanga TP is based on 12x FY23 NP(530m)
This is based on Rev 3160m / ASP 28 / Utilization 80% /Margin 25%
Issue is with revenue projection - capacity is assumed at 34Bln -
Why do they not assume the planned 48Bln in FY23

Clearly, there is a strong motivation within IB world to suppress glove valuations at this time.

RHB Analysis Supermax v mrDIY

Supermax FY Jun21 Jun22 Jun23

Revenue 7164 4485 5366
Profit 3813 1576 1569

MrDIY FY Dec21 Dec22 Dec23

Revenue 3391 4321 5135
Profit 456 616 717

Supermax Target Price : 3.15
Supermax Valuation : MYR8,568M

MrDIY Target Price : 4.41
MrDIY Valuation : MYR27,677M

WOW!!!!!

PjSeow - what I have read from RHB in unbelievable :

On 6 May - they released a report - with TP - MYR6.60 - this was based
FY21F FY22F FY23F
Rev 6751 6004 5366
Net 3417 2445 1750


On 27 Aug - they released a report with TP - MYR3.15 - this was based
FY21A FY22F FY23F
Rev 7164 4485 5366
Net 3813 1576 1569

I will let you draw you own conclusions but where is the regulation / governance - it is so obvious.

FY21 Profit Overachieved by MYR400m (more than most bursa companies make in a year)

FY23 minimum change with no basis - no change to revenue


Reduce Target price from 6.60 to 3.15 - what about the clients who believed them at 6.60.

PJSeow, you are correct about TA Analyst but unfortunately he is not alone. Many Analyst (CIMB, RHB) randomly change ASP, Capacity, Utilisation Assumptions to arrive at desired Target pricing with no accountability. The movement in TP over the last year is shocking for all glove companies.
It is unfortunate there appears to be no governance and regulation within the banks to control this.

Pjseow, thanks for the analysis. The points are very clear. Not sure why in Malaysia the Glove Co are singled out with such low multiples.
A question I have is can the Glove Cos do more to address this issue.
There are a number of concerns around which need to be addressed to normalise I think, namely

ESG uncertainty and Risk
China Capacity, competence and Cost
Oversupply to Demand
ASP visibility.

I do think the glove cos can do more in managing the comms around these issues.
The issue with shorts is due to no liquidity, addressing the above improves liquidity and will fix the shorts.