There's fundamental to it but less logical.
Stock market is about sentiment.
Now the sentiment for gloves is forward looking 9-12 mths ahead, where ASP will likely drop by 50%, increase in supplies by glove wannabes worldwide, little moat/barrier to entry, demand to decline in 2022 onwards.

Excellent Gooshen is quite right.

The price will likely drop to RM2.


But it's after this coming bonus issue.

Poorer economies like Indonesia, Africa, Pakistan, Afghanistan,do not contribute much to world economy.

Only the select few countries such as US, China, UK, Japan, Germany, France and India needs to re-open and represent 80% of the world economy.

@pjseow

Good to hear that.
At least you have a buffer unlike most of them here who had purchase it last few months.

Hope you will enjoy the fruit of your investment.

PE is a good indicator to determine if the company is overvalued or undervalued.

It cannot be used by itself but compared with rivals in the same sector.

Each sector has their own average PE but PE is allocated by the market capitalisation. Eg: Top3 leaders can afford higher premium of the average PE.

Glove has hit its peak in Oct 2020 in terms of premium and price premium had been reflected 9-12 mths ahead.

However, holding to glove stocks for long term(>5yrs) will still prove a winner as glove cannot be replaced or it doesn't have a replacement yet.

It's good to have research house around.
They bring company details when doing company interview and site visits.
These details are presented meticulously.

However, it's up to you to interpret the details rather than trusting their theories and buy/sell call.

To be honest, the total number of daily new covid cases worldwide tops around 840,000 and trending towards 400,000 since 1 month ago.
Long term glove would still in demand but unlikely to repeat last year frenzy of glove demand.

In this short term low PE for glove stock will still remain till year end.
PE will beginning to normalise and ASP begins to drop significantly by 60%.

IBs are pricing it forward 2022/2023/2024 when ASP drops to USD35 per 1000.

Besides that, IB is also looking at additional supplies from glove wannabes, like Mahsing, AT,Titijaya, Aspen,Inix, Kanger etc by end 2021 will come in with additional 10 bil supply per annum.
Market will be flooded with gloves.

It seems that gloves no longer is an oligopoly business but monopolistic. No more moat for gloves sector unlike before the pandemic.

@pjseow

Average around RM6.70 ?

@pjseow


Wow, heavily promoting MFCB.

You must have bought and hold a lot of MFCB since mid Jan 2021.

Posted by chengyee > Feb 3, 2021 8:04 AM | Report Abuse

Can show us how you get fv at rm1?
Thanks.

do keep us here more info so that we can make better judgement

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I don't need to. The share price has historically hover below RM1. With the current earnings, the share price will not sustain.

Just put a reminder in your phone calendar on 31/12/2021- Toyoven should be RM1 by now.

Posted by chengyee > Feb 3, 2021 6:01 AM | Report Abuse

Contract of this magnitude, now only reviewing funding options? Dont joke la. They only goyang kaki before contract award is it? Anything from now until the completion of powerplant if not already planned....u think can get contract?

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The Board of Directors of Toyoven mentioned it

https://www.theedgemarkets.com/article/toyo-ventures-executes-us323b-vietnam-power-plant-contract-after-12year-wait

It's still very preliminary stage and currently in the midst of reviewing various investments and funding options, including identifying strategic investors and other suitable parties to co-invest in the project.

It may take 1-2 years before development could even begin and another 3-4 years before power plant up and running.

Looks like it will follow the path of Jaks going down back to below RM1.

@lotuseater

Yup. Limited upside.

Reason is becoz normally for power producer once we're able to know their maximum earnings potential, you may compute specific target price.

Seldom will reach the targeted price but rather trade between 80%-90% of TP.

ANother reason is becoz it's planning to provide high dividend yield.

High dividend yield counters have lower capital appreciation.

FOr MFCB, in order for the counter share price to appreciate further, it needs to have a catalyst or news.

@calvin69

Yes. It's declining ASP growth. The management guidance is 50% per quarter.

Previously most glove counters are having 30% ASP growth month on month.

Refer to news report from June 2020.

I guess you came on late

Probably due to limited upside in earnings since its estimated annual earnings are between RM300mil to RM330mil.

Target price is between RM7.80 (PE=13x) to RM9.00 (PE=15x), limited upside to price as well.

JP Morgan is CORRECT.
The IB is referring to ASP normalisation from 2022 onwards
By 2023, ASP would have drop by half based on their forecast.
Do your math and you will appreciate their calculation

However, glove stocks will still enjoy good profit for at least the next 12mnths amid declining ASP GROWTH.

Thus, it depends whether investors willing to hold on for long term(>5yrs) or just ride this short term(<1yr) play till it's peak.

It's taking a breather and consolidate after a 42% rally.
Good result will likely be out this week.

Interesting forecast on the ASP from 2021-2023. Quite a significant drop.
81(2021) 57(2022) 36(2023)

Looking at this number smaller glove counters might not be profitable in view of the rise in raw material & operating cost of more than 15% year on year.

Probably the pandemic is putting CU stores launching on hold since the footfall is reduced during MCO period.

It's weird.
No news about the bonus issue after approved in 11/1/2021.

Now everyone know Uncle don't know mathematics.

Can't understand him anymore.

The ASP is still growing but the rate had been slowing down significantly, evidence by the growth in net profit despite increase in production capacity.

Seems no longer double or triple for net profit.
Not even 50%.
The days of extraordinary profit is over.
Looks like net profit for Supermax will normalise soon starting with next quarter.

There is always institutional short sellers waiting on the sidelines especially in the mature stock market cycle.

Tony Fernandes initially plan back in October 2020 was looking the borders to open for flights in March 2021.

Looks like his plans is delayed at least till December 2021.

How much can the company continue to bleed on daily overhead fixed cost?

@Ben Tan

I believe the world largest glove manufacturer refers to the number of glove production capacity instead of market capitalization.

Topglove is the largest and is currently meeting 25% of world demand.

@Ibelieve

The pandemic is still not under control but numbers worldwide in the last 1-week had been improving. You may check number of new cases and death rate country by country starting with US, UK, Africa and Asia.

The worst of all Spanish Flu in 1918 which claimed 50 million lives took 2-3 years to recover.

Science and technology to produce vaccine had improved in the last 100 years.

So you can roughly estimate when Covid-19 will likely start to recover.

Though Topglove's ESG rating is quite horrible at this moment, there are other glove makers which are much better eg: Hartalega or Supermax.

I believe the investing community should temporary boycott TOPGLOVE and shift your investment to other glove makers and make a stand that we only support companies that treat their employees well.

Expecting good quarter result next week TSMC is also running at maximum capacity since last quarter to meet world demand.

Unprecedented under value but offer downgrade TP from RM9.50 to RM8.45.
A foolish analyst indeeed.

All the best to you Uncle.
I feel for you at 88 years old, still holding losses in stocks.

Inari is lagging when comparing with Unisem.

Besides that, Inari has superior earnings and revenue over Unisem in the last 5-year.

Inari PE is half of Unisem.

Likely much more upside for Inari moving forward

Looks very unlikely.

A normal scene for privatization will be mopping up own shares when price is at the lowest. The recent scenario in 2020 is CCM.

If Neogenix can provide more than extraordinary profit during this pandemic, why would the selling shareholder,Neoh Cheu An want to give up his 60% stakes for RM6.5 million to Hong Seng.
Something fishy here.

Hopefully, the IDSS will be further extended to 31/12/2021.
Else may be a setback to glove and many other stocks.

Any idea whether building solar panels will be impacted during MCO ?
Are they essentiall?

Title mentioned ASP to rise in Jan and Feb 2021, but TP remains lower than TP in 2020.
The analyst doesn't even believe himself.

5G is the theme for 2021-2025
It would a new catalyst for Inari moving forward as more phones utilize more RF

Wait for the 11am news to know more about the impact on businesses.

Good opportunity for Frontken to be participate in TSMC new plant in US.

KYY, had officially made paper loss over 30%.
A first for him?

It's logical for Supermax to continue weaknesses in this efficient stock market.
Today information are widely available unlikely in the early 80s and 90s.
Thus, today investors, speculators and day traders have updated information in their hands at any time, thus making trading decision more effectively.
I believe vaccine is the Achilles heel for glove.

To KYY, there are many books you can read about the efficiency of today's stock market worldwide. Spend more time reading and learning rather than blogging.

KYY paper loss in Supermax had already exceed 20%
My advice to him is to keep the stock long term eg: 5 years to see the reward.
Writing more blogs will not help much but only to reflect his frustrations.
Glove counters will still provide much fundamental and good return over the next decade.
Will he live to see it.
That's why it's not advisable for anyone above 60 to invest in stocks.
60s and above is the best time to enjoy the fruits of your investment when you are young.

Probably less selling pressure as most traders, investors, etc are leaving for this holiday season.
They should be back on 4/1/2021

I think the best valuation for glove counters is post Covid-19 and after 2024 where demand is expected normalise, though still much higher then pre-Covid-19.
My take is pre-covid-19 , world demand is approximately 260 bil per annum in 2019
Post Covid-19, world demand should be somewhere between 350 bil to 370 bil per annum in 2024 onwards.

Supply side by 2024 from Top 5 largest and small players worldwide may come in between 110-130 bil per annum.

Based on this estimation, demand will almost offset the large incoming supply in 4 years time. Possible small oversupply of 20bil-25 bil per annum which may cause ASP to normalise toward USD35-USD45 level which is 50%-80% higher pre-covid 19 ASP.

I disagree.
I believe charting is as important as financial analysis.
Using both method yielded impressive results for me.

@gongkia

https://klse.i3investor.com/blogs/koonyewyinblog/2020-11-17-story-h1536464770-Supermax_is_the_most_underrated_glove_stock_Koon_Yew_Yin.jsp

Average price of supermax on 16/11/2020 is RM8, 1 day before he post this blog

KYY re-entered price is above RM8.
He's making losses already.

I still don't get it why ppl are still debating on glove vs vaccine, sell or buy glove.

Get a life all of you.

Know your investment principle that had been perfected, ignore the noises, buy or sell whatever stock as you see fit.

No justification required because you are the specialist in your investment.

At the end of the day, your portfolio grows or shrinks, look at yourself in the MIRROR, the answer lies there.

Buy a stock based on your understanding not from others.
Learn to do your own valuation and be good at it.
Prove to others than you do not require to follow the herd.
Buy or sell at your own judgement as it is your own hard earned money.
Unless somehow, you received a large donation of USD600 mil.