Supermx will.soon hold its FY 2021 AGM.
Below was the 5 takeaways from the FY 2020 AGM . Pls note point number 5 。

""The Chairman Mr Cheok said Supermx will balance between seeking growth and rewarding shareholders with dividend.""

Supermx has been paying dividends for the ladt 4 qtrs .

Q1 Final Dividend of 1 for 45 supermx.shares
Q2 Interim Dividend of of 3.8 sen
Q3 Special Dividend of 13 sen
Q4 Special Dividend of 15 sen

We can expect a Final Dividend to be announced wither end of this month or next month.


///////////////////////////////////////////////////////////////

Here are five things I learned from the 2020 Supermax AGM:

1. Revenue increased by 38.6% year-on-year to RM2.1 billion in 2020 while net profit excluding one-off items improved more than six-fold to RM495.5 million over the same period. The much better performance was on the back of the COVID-19 pandemic where demand for and the average selling prices of gloves both surged. Given the scarcity of raw materials, chairman Albert Cheok expects the average selling price of gloves to further grow by 3% on a monthly basis in the following year.

2. Cheok responded to Minority Shareholder Watch Group (MSWG) that Supermax’s production lines are currently running 24/7 to fulfil the heightened glove demand. The operations are paused for routine maintenance only. The company’s production lines have been booked for almost the entire of 2021. If an order is placed today, it will only be fulfilled in a year’s time.

Supermax is also targeting a dual listing on the Singapore Exchange in at least six months’ time to raise funds and appeal to more regional and global institutional investors.

3. Supermax will spend RM1.2 billion to expand its glove production capacity from 24 billion pieces in 2020 to 36 billion pieces in 2021 and 48 billion pieces in 2022. The plan is rather aggressive as mentioned by MSWG. The additional capacity is to cater to the current backlog. Older production lines will also be revamped to improve their capacity and efficiency.

According to Cheok, there will not be an excess supply because of the new norm; glove usage has surged in both medical and non-medical sectors due to increasing healthcare and hygiene standards. Cheok foresees the level of glove consumption will sustain at elevated levels even after COVID-19 vaccines are commercialised.

4. Supermax ventured into the face mask business in 2020. The company can produce up to 192 million face masks annually. The business is still at an initial stage to build capacity, customer base, and presence. This venture generally targets existing customers who already purchase gloves from the company. The motive behind this venture is to guard Supermax’s brand and improve its relationship with the public and customers, rather than an economic one.

In my opinion, effort is better spent focusing on Supermax’s strength, which is glove manufacturing in this case. The entry barrier of the mask industry is a lot lower than that of the glove industry as it costs a lot less to manufacture masks than gloves.

5. Cheok mentioned that Supermax will balance between seeking growth and rewarding shareholders with dividend. Profits will be allocated for capital expenditure to expand the business, which will ultimately create more long-term shareholder value and increase shareholder dividends.



https://fifthperson.com/2020-supermax-agm/

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With the surge in prices for coals and.natural.gas, China allow the power plants to increase tariffs . The cost of mfg in China will go up . Chinese goods will not be cheap anymore. US is facing very high inflation right now.

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https://www.channelnewsasia.com/business/china-power-policy-energy-crunch-metal-makers-2241571

MM, Master of twisting . Did I say ST cancel US project? Dont ask Toneefa for help lah. Your intention of bringing out the US project is not for promoting supermx but to tell the audience no money left for dividend. Tonee intention about US plants is opposite of yours . You dont have good intentions for supermx. You have nothing good to say about Supermx lah. Dont think peoples dont know about your bad intention..
司马昭之心，路人皆知。
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Ur master pjseow totally use imagination think he’s bigboss want cancel US factory & make up own expansion 2024-2027 expansion schedule lol
14/10/2021 9:59 PM

hahaha, elbrutus bro, you mean he is too free. The two male ducks can.keep.him occupied ?
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elbrutus pj bro ...present him a pair of ducks n get him to do something about them ,,,,lolllllllllllllllll
14/10/2021 9:30 PM

GO, Aiyo, I can smell your pungent jealousy. Why you like to assume those who support me are losing money ? The DarkKnight may have bought supermx before pandemic like FairTalk or like me who bought in 2019 and sold in 2020 and then bought back recently in 2021 ?
Why your heart is so bad ? Like to make fun of peoples who lost money or have paper losses, assuming everyone lost money except you and other glove haters.
Dont stood so.low lah .
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GlovesOff Not one pjseow supporter had profits since 5xx

Just flock of losers consoling one another
14/10/2021 8:22 PM

MM , I am.a supermx investor whereas you dont even own a single supermx share. Everyday you talk bad about supermx , profit drop.lah, price going down to 65 s lah and no more money for dividend etc. Are you.mad , insane or crazy ? When did ST said company no.more money to pay dividend? The site for the US plant has not even been .selected yet and here you are talking like supermx CEO.
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MoneyMakers Cash all gone 4 US factory..no cash 4 shareholder div = no use to share price
14/10/2021 5:00 PM
14/10/2021 5:37 PM

Benhobenhobenho CASH IS KING in this time of pandemic. The company with the billions in its coffers can go for expansion, mergers n acquisition.
14/10/2021 5:46 PM

MoneyMakers Walao pjseow ur not bigboss..cannot simply instruct cancel US factory & make up own 2024-2027 expansion plan lol

Keep whatever imagination inside own head..dont let out..crazy fella
14/10/2021 5:51 PM

MM , Money.spent on capacity expansion must generate good return on future earnings. Supermx management had only committed spending 1.39 billions to expanding its capacity from the current 26.2 b to 36 b by the end of this year and to 48.4 b
by end of next year. There is no concrete plan yet on spending US 550 millions to build the US plants. With the ASP coming down to 26 to 28 , supermx management will consider spending another 1.39 billions from 2024 to 2027 by expanding another 22.4 b capacity to make it to 70 b. The PAT return by adding 22.4 b capacity locally in Malaysia, Thailand or Vietnam will b e better .

PAT per year for 22.4 b capacity

is 22.4 x 26 x 0.85 x 4.15 x 0.18 = 370 millions

ROA = 370/1390 = 26.6 %

This return.is better than putting money in FD which yield only 2 to 3 %.

A 70 b capacity with ASP of 26 can generate

PAT = 26 x 70 x 0.85 x 4.15 x 0.18 = 1156 m per year. The EPS is 42.5 s .
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MoneyMakers Cash all gone 4 US factory..no cash 4 shareholder div = no use to share price
14/10/2021 5:00 PM

GO, all manufacturing were affected by the MCO lah. These had been more than priced in already. Not a surprise .

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GlovesOff Haha - 50% QoQ ?????

Very good ... see the -70 QOQ effect from tg ...

This rd will have selling pressure from declining Qs from all 4 cicakmen congrats
***********
Projected PAT = 70 x 26.2/4 x 0.65 x 4.2 x 0.45 = 563 millions

Power shortages are affecting China manufacturing.
----------------
https://www.scmp.com/tech/tech-trends/article/3152042/small-semiconductor-firms-say-chinas-power-crunch-adding-problems

I will only bet with you when I am.confident I will win. I must have done my calculation before I dare to challenge you. Everyday millions of peoples are betting on.various games and sports including stock.markets. They get their joy and thrills from the betting. Nothing unusual .
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MoneyMakers Aiyoyo pjseow if betting here gives u joy, then u got serious mental problem
13/10/2021 10:10 PM

GO , Either.way is 40 %. I bet in 6 months time the pricre will go up 40 % to 3. You bet it will go down 40 % to 1.32 in 6 months time. Fair bet. OK . The bet is On ya ? Whether you win.or I win , I will be happy. Just enjoy the fun of betting. As usual , MM is so quiet. He chicken out again.
------------------------------
Cincai la so long you HAPPY

+40% needed to hit 3... hmm see which santa funds willing to pump

GO , I dont joke with my numbers. Will show you tomorrow.
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GlovesOff Really JOKE of day ...

Pjseow you roleplay as dsst is it ???
********
I had done some simple calculations that show Supermx has the ability to expand its capacity to 72 billions using the cash piles and pay 15 sen per qtr for the next 7 qtrs simultaneously .
13/10/2021 7:59 PM

GO and MM , last time you repeatedly quoted RHB PAT projection of 500 m mah. Thats why I gave you a chance to bet.by handicapping you 800 m but you still.lost. This time you keep repeating 65 s . So I give you another chance to bet on pricing . If you do not have confident to bet on your 65 s , we can.decide to bet on my tgt price at 3 .00 and yours at 1.32 so that both tgts are at equidistant from todays 2.16 to.make it a fair bet.

OK .the bet is On . my tgt is 3.00 in 6 months time and your tgt is 1.32 in 6 months time.

-----------------------
GlovesOff PAT so what? still lose money

bet price hits below 2 faster than your so called 3 la.

The last time your prediction.of 500 M PAT was out by 100 %. You lost.mah. Never mind , this time we bet on pricing. If you.are so confident of 65 s in.6 months time , why not take the bet ?
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MoneyMakers Aiyaa pjseow u got no credibility/experience to make price prediction..proven wrong soo many times alrdy

Sure many here regret ever listening to u
13/10/2021 5:52 PM

MM , I want to bet with you again. Since you say in 6 months time , the price will drop to 65 sen or drop 151 sen.from today 2.16 , I say the price will go up to 216 +151 or 367 in 6 months time. It is a fair bet .
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MoneyMakers By the time ASP stabilise early nxt yr, alrdy 2 bad QRs..price also near 65sen alrdy
13/10/2021 5:19 PM

Tonee and bang miskin ,

I am more optimistic and expect a higher dividend of 15 sen not only for the coming qtr but for the next 7 qtrs . I had done some simple calculations that show Supermx has the ability to expand its capacity to 72 billions using the cash piles and pay 15 sen per qtr for the next 7 qtrs simultaneously . THere is still ample cash in hand .
With the current price , the EFFECTIVE Dividend Yield can be more than 15 % for the next 5 years . If the price drop further , the DY can even hit 20 % for many many years to come .

Cash is king .




Posted by bang_miskin > Oct 13, 2021 2:19 PM | Report Abuse

ToneeFa: yup agree with pjseow, SpmX coming QR should be ard 500mil+, with dividend ard 0.10

_______________________________________________________________
If dividend is at 0.10 per share, at current price, that makes it one of the highest yield dividend stock. Twice the return of Maybank.

I assumed a 10 days shutdown during EMCO and 70 % Utilization for other days during.MCO.
---------------------------
bang_miskin @pjseow, does the utilitzation of 65% take into account the 2(3?) weeks shutdown from EMCO?
13/10/2021 1:36 PM

In the next 3 to 4 weeks , Kossan , Harta and Supermx results will be out . Any estimates ? Although supermx did not give any briefings and guidance for last QR, I estimated that the blended ASP for last Q was between US 82 to US 84 . I expect the coming QR ASP to be about US 70 and Utilization between 60 to 65 % . As for capacity , I am not sure whether it is still 26.2 billion or already hitting 30 billions . As per plan, the capacity will hit 36 billions by the end of this calender year .

Assuming capacity still at 26.2 billions , utilization of 65 % and blended ASP of US 70 ,

Projected PAT = 70 x 26.2/4 x 0.65 x 4.2 x 0.45 = 563 millions .

My assumption is no more spot sales and orders are mainly from previous old contracts with deposits and lock in prices

MM , Which.assumptions is incorrect? ASP s? Capacity ? Exchange rate ? Utilizations or Nett Margins ?

I had been.using the worst case.ASP of US 24 way back in May this year even before IBs talked about US 26 , 28 or 30 one month ago.

Capacity of 48 b per annum in 2023.is what supermx.management committed.

PE of 15 was the historical 5 year average for supermx before pandemic.

Exchange rate of between 4.1 and 4.2 is the range.in the last 10 months.

Utilization of 80 to 85 % is reasonable and hustorical average number.



--------------------

MoneyMakers Pjseow Remember u always list down IB high TPs to justify own high TP rm6/7/8 calculation based on nonsense assumptions..just shows ur inexperience
12/10/2021 6:23 PM

MM , This is what you quoted this morning.
Maybank IB made sell calls for harta, topglov and kossan.

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tock: [SUPERMX]: SUPERMAX CORP BHD

Oct 11, 2021 10:57 PM | Report Abuse

Jeng3 Maybank

ASP could return to pre-COVID levels of US$23 (peak 2021 @ USD130) by mid-2022.

With the stiff competition from China, we believe the oversupply situation could potentially extend longer - inevitable price war.

The threat from China is real. Already, to seize the market share, the Chinese glove makers are selling their gloves at more attractive pricing in Europe relative to their Malaysian counterparts.

We Downgrade the sector to NEGATIVE (from NEUTRAL). We are SELLERS for Top Glove, Hartalega and Kossan

MM and GO , I thought this morning both of you showed the Maybank report which is so negative about gloves and made sell calls for Harta , Topglove and Kossan ? Markets no more listening to IBs ? hahaha.
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MoneyMakers Harta/kossan both near prepandemic level alrdy..supermx 3x more overvalued than Harta/kossan

Dont be surprised if harta/kossan stagnant while supermx heavy drop
12/10/2021 5:29 PM

IM 777, You are so clever in investing . I congratulate you loh. For me ，can get 18 % pa on average every year also enough loh. Can retire peacefully and healthty is more important. Dont forget to contribute some.to society ya.
君子爱财，取之有道。施捨有德。
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investmalaysia7777 Thats why pjseow annualised return is only 18% pa haha. we are making much more than that
12/10/2021 4:48 PM

What is market ? A market must consist of willing buyers and willing sellers . In an uptrend market , the sellers is not optimistic the price will go higher . In the meantime , the buyers are optimistic and think that the price will go higher . Similarly , in a downtrend market , the sellers are pessimistic while the buyers are optimistic .
There are always two opposite parties to make a transaction . There is no right or wrong . Only time will tell .
In Oct last year , all IBs are super optimistic and give buy calls with super high valuation and tgt prices . Sentiments were super postive and glove counters were all time high with super high PE .The tgt prices are ridiculously high at more than 30 . Many who followed the IBs recommendations were caught off guard when the prices started tumbling while glove makers continued to make record profits in Nov ,Dec 2020 and Feb ,May and even August 2021 . It was a great mistakes for those who do not look at the fundamentals and followed the IBs super positive sentiments .

Today , it is in reverse gear , All IBs are super negatives even though just two months ago in August , Kossan ,Harta and Supermx still made record profits . PE s are at record low . Do investors learn any lesson by following the majority sentiments ?

Are we surprised why out of 10 investors , 7 lost money , 2 breakeven and only one make money ? Herd's mentality still prevail ?

As Charlier Munger said " the big money is not in the buying and selling but in the waiting ,

hng33 ,

Sorry , a correction .

FY 2020 REvenue is 2131 millions not 1488 millions .

hng 33 , If you look at the FY 2019 ( July 2019 to June 2019 ) and FY 2020 ( July 2019 to June 2020 ) Financial numbers , the nett margin were 8.3 % and 24.7 % respectively .

FY 2019 ( 100 % pre pandemic )

ASP USD 19.7
Revenue 1488 millions
PAT 124 millions
Nett Margin 8.3 %


FY 2020 ( 8 months pre pandemic and 4 months pandemic )

ASP USD 25.5
Revenue 1488 millions
PAT 526 millions
Nett Margin 24.7 %

In my opinion , the nett margin will not go back to the 8.3 % at prepandemic era due to following reasons .

1. THe 22.4 new expanded capacity is 100 % Nitrile . THe Nitrile ratio
will increase from FY 2019 of 52 % to more than 80 % in 2023 .Nitrile ASP and Nett Margin are higher compared with Latexx gloves . FUrthermore the equipments purchased are the latest state of the art fully automated machines with very effective manpower utilization of only 1.7 worker per million .

2. Supermx had changed its business model since March 2020 by eliminating the middlemen like agents , dealers etc . About half of its capacity are sold direct to FInal customers at Distribution price which is much higher .
The last 2 FY ,Supermx has the highest margin among the big 4 despite the capacity still at 22 and 24 billions respectively .The trick comes from the changed business model .

3. THe blended ASP will not go back to the pre pandemic era of less than 20 . THis is a consensus among the MARGMA members and IBs . EVEN the super negative JP MOrgan also projected USD 26 as the normalised ASP in 2023 and agreed that the margin will be double than the pre pandemic era .

4. If in FY 2020 when the ASP was at US 25.5 , the nett margin is 24.7 %. Using 20 % as nett margin projection is not overly aggressive and optimistic . IF the ASP can come down to USD 26 from the high of about 80 to 90, the raw materials will also come down correspondingly .

Projections are projections whether it will be correct or not . It is a question of judgement and company business strategy.

hg33 , sorry I miss out the exchange rate of 4.15 in my previous message .
THe PAT for 2023 should be 26 x 48 x 0.85 x 4.15 x 0.2 = 880 mil where

26 is the ASP
48 billion is the capacity
0.85 is the utilizataion rate
4.15 is the exchange rate
0.2 is the nett margin

Dear hg33 ,

I am fully aware of what you mentioned . You can see how I quoted the consensus earnings of IBs for FY 2022 ( 1730 millions ) and FY 2023 ( 880 millions ) in my previous messages . THe 1730 millions PAT is less than half of FY 2021 PAT and 880 millions PAT in FY 2023 is also about half of FY 2022 earnings. Nett NEtt, FY 2023 earning is less than one qtr of FY 2021 earning of 3815 millions . The IBs already predicted FY 2023 to be at normalised ASP of between US 26 and 28 per 1000 pcs . I supposed they arrived at

the PAT = 26 x 48 x 0.85 x 0.20 = 880 mil.

EPS = 880/2720 = 32.3 sen

It depends on what PE you want to give to the EPS of 32 sen at stabilised or normalised state . At PE of 10 , it is still worth rm 3.20 for a nett cash and growing company .

With the huge cash pile of few billions , Supermx has the cash to expand its capacity further to 70 billions or more in subsequent years after 2023 even after assuming it pay a dividend of 15 sen per qtr for another 8 qtrs . It is not wise to cut loss at such low price . I will share in my next article how supermx can still maintain a nett cash position of at leass 500 mills for the next 5 years after paying off capacity expansion to 70 billions and another at least RM 1 of dividend for next two years . Anyway , thks for your advice .

Cash is still king especially if there is a price war . Those who has long market presense and can expand its capacity by 3x without borrowing will win .


Posted by hng33 > Oct 12, 2021 12:05 PM | Report Abuse

Dear pjseow

Despite of your insistence on supermax, beware of current opportunities cost loss. Supermax current earning is mask by its earlier book prepayment contrctyal order price us is much higher than current downtrend spot price.

These earlier booked high ASP prepayment contractual orderbook will diminish in next 1 or 2 quarter. Then after, the profit will cliff down significantly to reflect actual ASP price.

Supermax real profit impact will likely stabilise only after 3 or 4 quarter next, which i think will be better time to re enter for bottom fishing and value buy for its net cash position and high dividend yield.

GO, I dont make buy or sell call lah . How to go Holland if buy in 2019 at 70 sen and sell in 2020 at 8.00 and buy back at 3 in 2021? Who knows I can sell at 4 or 5 in FY 2022 or 2023 after receiving more than rm 1 in dividend.

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GlovesOff If newbies follow you as sifu surely holland

Mbb write one , don't like , hold until next pandemic lo ....
**********
BUY HIGH SELL LOW ? I better.stick to my contrarian approach.
12/10/2021 10:27 AM

GO, I remembered Maybank was the first IB to give a super.high tgt price for topglove at RM 25 in August 2020. Those who listen to this IB are dead with heavy losses. Now only making sell call after the price losing 70 % from the peak for more than a year. You want us to listen to this pathetic IB ?
BUY HIGH SELL LOW ? I better.stick to my contrarian approach.

GO, I did not say gloves has no futures. I only meant why talked about buying and selling which were already in the past. As I mentioned in.my previous message , Gloves will be growing at 12 to 15 % per year post pandemic based on.MARGMA projections.
The per capita usage of gloves from the developing world which consists of 85 % of world population is still.relatively much lower at 30 plus pcs per year compared with the developed world at more than 200 pcs . The room.for growth is still tremendous.


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GlovesOff elephant in the room ~ why JUMP back in haha if gloves is the PAST ???
***************
This year bought back 1000 k at at averaging of 3.00 after minus dividend recd .
11/10/2021 6:44 PM

GO , I did not sell.at peak lah , I sold my 400 k which I bought in 2019 plus some in June 2020 at average of 8 ( after split) only lah. I never sold at the peak in
my whole life and never.bought at the cheapest. I am not so lucky .This year bought back 1000 k at at averaging of
3.00 after minus dividend recd . Yes , I give back some but not all leh. You can count yourself . Hope to get.another rm 1 per share special dividend in the next 2 years. Why look at the past , look at future mah. You cannot change the past but can decide for the futures.
--------------------------------------------
GlovesOff no ah, only YOU and your pseudo acc fairtalk BODOH never sell at peak ...

worse is you sold at peak and give back/loss, everyday stress write long2 promote also futile

Supermx Potential Return From Capacity Expansion


All company needs to make good judgement on how to use the Cash In Hand wisely .

1. Capacity Expansion can generate good future returns

Based on simple calculation, the best way to use the cash is for capacity expansion which can generate double digit return

For 1.39 billions , supermx can install 22.4 billions pa capacity

Earning from the 22.4 billions capacity

PAT = 26 x 22.4 x 0.85 x 4.15 x 0.20 = 411 millions per year

ROA = 411 /1390 = 29.6 %.

Even if I use a lower margin like 15 % , it can still generate twenty plus % return

This return is much much better than keeping the cash in the bank as FD which can generate only 2 to 3 % .
In my opinion, supermx management should spend another 1390 billion from 2024 till 2027 by adding another 22.4 billions capacity ( about 6 billion a year ) to hit the 70 billions capacity .THis will help boosting up PATs

2. Payout as Dividend

Supermx had paid a total of 31.8 sen as cash dividend in the last 3 qtrs . Before that , supermx had also distributed 1 out of 45 shares as dividend . This is equivalent to 22 shares per 1000 or 22 sen with the market price of RM then . So the total payout for the last 4 qtrs are actually 31.8+ 22 sen or 54 sen . This is 10 times what supermx payout during pre pandemic of only 5 to 6 sen per year .

Are you sleeping? The last 2 dividend payout were 13 s and 15 s respectively ?

GlovesOff 3.8c ??? HAHAHA
***********
payout of the next lucrative dividend which we hope will be very soon.
11/10/2021 1:23 PM

GO, Are you implying that the 4 founders of the big 4 are bodoh also for not selling at the peak ?
You are smarter than them who never sold their shares in the last 20 years rain or shine but they are in the top 20 richest men in.M alaysia last year ?
-------------------
GlovesOff BODOH old timers won't even both commenting here

"STILL HAVE" HAHAHA ... why so noob never TP at peak ???

How many bot at 2.2x ??? vs those at peak ???
***************
at the present price these existing shareholders still have capital gains.
11/10/2021 1:55 PM

Gloves manufacturing is a growing industry . It has been growing at 8 to 10 % CAGR in the last 20 years before the covid 19 pandemic . The big 4 glove makers have also been growing with double digits earnings CAGR and becomes 100 ,200 and even 300 baggers . MARGMA projected the growth rates will be between 12 to 15 % per year post pandemic . With the current demand at 500 billions per year , a 12 % CAGR will bring total demands to 1000 billions per year or double the current numbers in 6 years time using the 72 rule. The growth will come mainly from the developing countries which currently has low glove usage of 30 plus only compared with the developed world of more than 200 .

Supermx has made 4341 millions in the last 2 years and is projected to make another 1730 millions in FY 2022 . The total profits will be 6071 millions . This super extraordinary profits can transform supermx in the following ways .

1. Capacity Expansion

Supermx can never dream of expanding its capacity to 48 millions within 3 years had it not made billions in the last 2 years . With the cash , supermx can now triple its capacity to 70 billions per year by spending 1390 x 2 millions or 2780 millions without borrowing . THis is one of the biggest benefits of making the billions in the super ordinary years .

2. Paying Lucrative Dividend

Besides spending 2780 millions from the 6071 millions profit, supermx is able to pay lucrative dividends to its shareholders . A total of special dividend of RM 1 per share or 2720 millions can be paid out to to reward loyal shareholders .

3. Nett Cash Company in post pandemic

After spending 2780 millions to triple its capacity to 70 billions pa and pay out 2720 millions or RM 1 to its shareholders as dividend , there is still a balance of 6071 - 2780 - 2720 = 571 millions cash in hand .Supermx will remain as cash rich or in nett cash position .

4. Continue to be Profitable during post pandemic

With the new expanded capacities from doubling to triple the prepandemic capacity, supermx is still expected to make 800 to 1000 millions in the years to come with ASP stabilised at between USD 26 to 28 . With its changed OBM business models , supermx has been able to generate the best earning per billion capacity and also the best nett margins in the last 2 years .

5. Supermx other potentials

Supermx also has its contact lens business besides gloves . With its nett cash plus continued cash generations, supermx can look into merger and acquisitions to further boost its profits .

Supermx is no more the old supermx in prepandemic . Besides having the highest cash in hand per share , highest nett margin ,highest return of capacity ,it can triple its capacity and pay the highest DY in near future .

Which company in Bursa can have the above attributes ??

Disclaimer : It is not a buy or sell call . It is for sharing only .

There was no agreement in the six hr talks in.Zurich between Tiger Yang of China and Sullivan of USA . It looks like jUSA will continue to impose tariffs on Chinese goods. With the steep hike in natural gas and coals , the cost of producing gloves will be much higher. I believe the ASPs of Nitrile gloves will not drop below US 30 .

IM 777, You learn primary school.maths or not ?
Supermx made 526 m in FY 2020 , 3815 m in FY2021 and most likely another 1730 m in the coming FY 2022. The total is 6071 m.
This earnings can be used to expand the capacity from 22 b to 110 b and still has a balance of 511 m. Simple maths will tell you that the capacity can be 5x of pre pandemic 22 b . Supermx can decide to use 2x 1390 m or 2780 m to make total capacity to 66 b and the balance money used for dividend.paynents .

Balance for dividend = 6071 - 2780 = 3291 m

or Dividend per share of 3291/2720 = 121 sen.

Assuming an.ASP of US 28 in normalised periods, the 66 b capacity can make

PAT = 28.x 66 x 0.8 x 4.15 x 0.2

= 1227 m per year

This is 10 x what supermx made in.FY 2019 .
The EPS is 1227/2720 = 45 s
If use.PE of 10 we also can get a value of 4.50 .
Plus the rm 1.21 total dividend.distributed, the total value should be 4.50 + 1.21 or 5.71 per share . If you.sell me at 1.80 , I will buy loh. So much discount you want to give ?
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investmalaysia7777 1.8 equivalent to 3.6. much higher compare to prepandemic price. harta and kossan already drop to pre pandemic price.
07/10/2021 5:55 PM

IM777, You won by listening to IBs ? Oop forgot you are working for IBs.
I won by not listening to IBs. Lasy year , when they have buy calls at extreme high PE s and high tgt prices, I sold all . Now when they say sell with extremely low tgt price , I buy . Follow Warren.Buffet and Coldeye Contrarian approach. The verdict will be know in one to two years time.

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investmalaysia7777 no need to argue la. proven we (naysayers) are right. all other things are bullshxt. Winners say it all.
07/10/2021 5:12 PM

The prices of supermx has come down from the high of rm 12 since Oct.last year but the IBs.had never make any.sell.call until the last 2 to 3 weeks after the prices dropped to about rm 2.20 to 2.40. The IB s should have made the sell calls when the prices reached the inflection points or turning points. What is the point for IB s to.make sell.calls now after the prices has dropped 80 % with PE at 1.6 . Worst.still they.set the tgt prices at rm 1.80 to 2.35 now from the high of 6.60 to 8.35 just a few months ago. Dont tell me they dont know ASPs are coming down in.May 2021 ?
I am the first person to assume a worst case scenario with ASP of US 24 in May right after supermx briefed the analysts that ASPs were coming down at the rate of 15 to 25 %.
When the cash in.hand reached 60 % of the market cap ,dividend yield at the high of more than 15 % and PE.at 1.6 , then make sell calls???

Many investors trusted the IB s super high tgt prices last year and bought at super high prices with high PEs when these IB s made buy calls. Even in May this year , these IB s tgt prices were still averaging at rm 7.30 and make buy calls . Now the same IB s are making sell calls with.extremely low tgt prices with.extremely low PE. These IB s are advocating buy high and sell low. How to make money ?

Supermx potential dividend yield

A company can pay good dividend only when it has good cash in.hand plus ability to continue to generate more cash in future.
Supermx has 3780 m caah in hand as at end June 2021. Assuming supermx made another 1730 m in FY 2022 and 880 m in FY 2023 based on IB consensus, supermx still has 1323 m cash at end June 2023.

Cash in hand 3780 m

Add FY2020 profit 1730 m
Add FY2023 profit 880 m

minus customer deposit 631 m

minus last 15 s dividend 408 m

minus cost cap to 48 b 764 m

Cash in.hand in June 2023 will be 4587 m

This cash is equivalent to RM 1.69 per share .

Supermx can afford to pay a total of RM 1.20 at 15 sen per.qtr for the next 8 qtrs and still has a balance of 1323 m cash at beginning of FY 2024 .
This 1.323 b cash plus new earnings from FY2024 are.more than sufficient to fund further.capacity.expansion to 60 b or more .
At supermx current price of 2.30 , the dividend yield is 26 % for the next 2 years.
For the subsequent years , even I assume the earning stay flat for next 3 years with higher capacity of 48 b and more , supermx can still.pay 25 s per share dividend and maintain a 1 b cash in hand post pandemic .

CASH IS KING .

Munfatt , Dont be so pessimistic. Supermx last QR still showed.631 m deposits in the financial from.customers. The orders from these deposits are about 2 b with " lock in "" prices from previous qtrs. The earning from these orders can be fulfilled in 1H of FY 2022. The consensus PAT from IBs are 1700 millions for FY 2022.
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if FY 2022 PAT hit 540mil, EPS 20cent, the FY2022 PE only 11 at cur price

so let wait and see what is the 1Q result for FY 2022

Anything more than 200mil, 37% of FY 2022 target

During FY 2019 ( mid 2018 to mid 2019) , Harta used to be the most efficient in Earning per billion capacity or EPB followed by Kossan , supermx and Topglove. This is due mainly to Nitrile to Latexx Ratio. Harta has the highest followed by Kossan , supermx and Topglove . The respective EPB are as follows:
Harta 11.2 m
Kossan 7.9 m
Supermx 5.6 m
Topglove 5.4 m

Since FY 2020 , Supermx EPB was the highest
beating Harta , Kossan and Topglove although its Nitrile to Latexx ratio remain.at 3rd placing at 68 to 32 % in FY 2021. When supermx capacity increase to 48 b in CY 2023 , its Nitrile ratio will be increased to 80 %. I projected Supermx will remain as.champion in EPB in the subsequent years.

Supermx also has the highest nett margin for the last 2 years at 24.7 % and 53.2 % respectively followed by Harta at 17.5 % and 50.9 %.
Topglove is 12.3 % and 49.3 % followed by Kossan at 12.6 %.and 44.3 %.

I did a quick calculation on the earnings per billion capacity for the big 4 glove makers and found that supermx has the highest earning per billion or EPB for the last 2 years as follows.

FY2020 FY 3021
Supermx 21.9 m 146.7 m
Harta 14.8 m 112.0 m
Kossan 10.6 m 93.7 m
Topglove 7.2 m 83.2 m

Supermx is the most efficient inusing its available capacity to churn.out highest.earning although its nitrile to latexx ratio is lower than Harta and Kossan. The main reason for Supermx high EPB is the change in.business model since March 2020 which enabled a much higher distribution earning by cutting off the middlemen by selling direct to final customers.

Note : For fair comparison, the FY2020 start from July 2019 to June 2020 and FY2021 start from July 2020 till June 2021 for all except Topglove which cut off in.end May instead of end June.

MM , What is your estimate for supermx.next QR Earning? 500 millions?

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MoneyMakers Maridien Better put 100K fd 6months..after 2 bad QRs sure can get 65sen
05/10/2021 3:13 PM

Rubberex goes into property.
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https://www.businesstoday.com.my/2021/10/04/rubberex-diversifies-into-property-with-rm180-million-stake-in-empire-city-mall/

Can someone tell me among the big 4 , which.one is the most efficient in using their capacities to churn out the.highest Revenue and Earning per billion capacity for the last 2 years.

iamnotinvestor, as I said earlier , I believe the supermx " BLENDED " ASP will be higher than US30 . My ""Blended "" ASP is not the typical Weighted Mfg ASP of Nitrile and Latexx ASP only but the Blended Mfg.ASP and Distributor ASP. I felt that IB s had neglected the change of supermx OBM business model since March 2020.
I will explain it later when.I have time.

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iamnotinvestor pjseow, given the inflation n hike of raw matls, would you think the ASP will remain low 30 or high 20? I wish it is below 30 or even 20 just to wiped out all the small n up coming competitors

iamnotinvestor , The ASP of US 28 is a consensus between the IB s. Harta CEO gave ASPs between US 30 to 35 of Nitrile gloves for normalised situation while IB s gave ASP numbers between 26 and 30 for normalised state. MARGMA gave a projection of 40 to 60 % higher than pre pandemic ASP. I just take the middle of US 28 for blended based on 75 to 25.Nitrile ratio in.FY 2023. In my personal opinion, the blended.ASP for supermx is between.US 30 and 33.during.normalised state.
Anyway ,.ASP.of 28.is still 40 %.higher than pre pandemic of US 19.6 and the nett margin is 25.% which is much higher than the margin of only 8.5 % when the blended ASP was only 19.6 in FY 2019. It can be proven mathematically.a 40 % increase in.ASP can result in tripling of nett margin.
With the doubling of capacity, increase in.ASP and margin, you can.see a 7 to 8 x.increase in.PAT.compared with.pre pandemic.earning of 124 millions. This itself has a CAGR of more than 65 % from FY 2019 to 2023. A PE of 15 will give a price of 7 to 8 x of prepandemic price of 70 sen per share not to mention the huge cash in hand of about rm 1 per.share in the company assuming after paying a lucrative 60 s for FY 2022.

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iamnotinvestor ASP OF 28 for year 2023 n 2024 is way too conservative. I would like to believe at least 40usd.
03/10/2021 5:57 PM