MMM , You mean Supermx next.QR profit ? Easily double your numbers of 200 to 300 millions . Last qtr.you predicted 500 mil based on RHB number . When QR was out , you.must be shocked to see a 959 millions profit.


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MoneyMakers Who predicted TG profit only 600Mil?? Nobody

What will be nxt QR profit..200Mil?? 300Mil?? Definitely more IB downgrades incoming

How can negative news alrdy priced-in when nobody expected such low profit so fast
19/09/2021 9:04 PM

GloveOff , the projected PAT of 882 in FY2023 is very low already . This number is less than 1/4 of FY 2021 PAT . RM 882 million per year is 221 million per qtr . Although this number is a big drop compared with the peak of 3815 millions in.FY 2021 , it is still.relatively much higher than FY2019 Earning of 124 millions only. MM pre pandemic 65 sen tgt price is really unrealistic not to mentionby then , supermx cash would have reached more than 5 billion by then .

GloveOff , I was using the consensus Projected Earning from.UOBKay Hian Analyst report dated 8/9/2021. Please read my comment below which is very clear . The consensus projected earning for supermx in.FY2023 at normalised ASP of US 25.5 was RM 882 million which is 7.1 X of FY.2019 earning of ONLY 124 millions.
Pls dont simply said I used Last year briefing to project supermx FY 2023 earning.
GO , you seems to have dimentia problem. My comment was only 5 days ago.
------------------------

Stock: [SUPERMX]: SUPERMAX CORP BHD

Sep 14, 2021 2:51 PM | Report Abuse

Based on IB UOBKayHian latest report dated 8 September , it showed a consensus PAT of 882 millions for supermx in FY2023. Its assumptions of normalised blended ASP is US 25.5 per 1000 and nett margin of 15.1 %. It also assumed a capacity of 36 billions pcs. p.a.
FY 2023 will start in mid CY 2022 which is 9 months from now. The assumption of ASP 25.5 is lower than the 30 to 35 which Harta CEO Kuan mentioned in HARTA AGM.
The 882 million profit is 882/124 = 7.11 times higher than pre pandemic profit of 124 million.
Will the market give the same.price to supermx when.its earning is 7.11 x the pre pandemic price ? Pls note that supermx will be a much stronger company in terms of cash position , capacity and its new business model . The IB also assumed a flat.ASP of 25.8 and.a lower nett margin of 14.6 % in.FY 2024.

Well , despite this consensus number from IBs , Money maker will.still continue his BS of 65 sen pricing post pandemic

The prepandemic 2019 supermx prices were between 1.40 to 1.60 . These prices are equivalent to current 70 to 80 sen. I remembered these prices very well because I bought 400k with the average prices of about 1.50.

The supermx in 2019 had 22.billion capacity.
Its cash in hand was only 157 millions.
Its debt was about 400 millions. Supermx was a net debt company then.
Its nitrile to latex ratio was 52 to 48 %
The average PE ratio in.2019 was about 15 to 18.
Since then.Supermx made 526 million in.FY2020 and another 3815 million in FY 2021. I expect supermx to.make another 2300 million in FY 2022. The total will be 6641 millions. Out of this 6641 millions , 857 millions ( inclusive of the coming 408 millions dividend) had been.distributed as dividends and an estimated loss of 350 millions on sbb .There is still a nett balance of 6641 - 857 - 350 m = 5435 millions added to the company by mid of 2022 or beginning of FY2023. This amount is about EPS rm 2.00 which is in the form of cash and capacity expansion. It means that the value of 1 supermx share in.mid 2022 is the sum of pre pandemic share price of 75 s + 200 s = 275 s.
If you buy at yesterday price of 2.58 , you are actually buying a pre pandemic.supermx share at 58 s only already .
To give a simple analogy , a LV bag worth 7500 with 20000 cash inside will not be sold at 7500 . No one is so stupxxd to do that. When you pay 25800 for such bag , effectively you are buying the bag at 5800 which is at a discount actually.
I am actually very happy.to have a second chance to buy supermx share at lower thsn pre pandemic price actually.

Tonee , Wow haha .your imagination is great but the joke is not about Monica Lewinsky spermx joke .The joke is about Bill.Clinton s thinking that he can get still get a US 65 per session pre pandemic price but got a sacastic reply . I will.share the joke later after I give MM a satirical reply on his repeated day in day out 65 sen supermx prepandemic price.
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ToneeFa Haha pjseow, I thought that was the 69sen spermX Bill Cliton joke...
18/09/2021 6:49 PM

Haha. Moneymakers 65 sen supermx price during 2019 pre remind me of my.American joke on Bill Clinton.

What article? My American joke ? I am enjoying my holiday lah.
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investmalaysia7777 @pjseow, your article done? I'm waiting kikiki
17/09/2021 3:12 PM

Today is Malaysian day. Let the atmosphere be harmonious . Dont be stressful . Let me tell you all an American joke to de.stress . Want to listen ?

Topglove will see better earning after ban lifted.
Kenanga estimated ASP will be normalised between US 30 to 35.


https://www.thestar.com.my/business/business-news/2021/09/14/top-glove-to-see-better-earnings-after-ban-lifted

Shhh...You cannot ask such.question in public forum. I dont have license. Someone already give me friendly advice . Just read my past comments. Tgt price depends on what PE you want to assign.to the EPS. My last comment is based on OUBKayHian consensus estimate of FY2023 PAT of 882 millions. ASP Assumption is US 25.5. This PAT is 7.11x of supermx prepandemic PAT in FY 2019. The EPS is 32.4 s . You can decide what PE you want to give .
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Iamstilllearning Pjseow
May I know what is your target price for supermx?
Just interested no any harmful.

Thank you
14/09/2021 9:27 PM

Stocksafeplayer. I like this Hokkien Song 爱拼才会赢 very much . Ai Pia Chia Eh Nyia . 30 % depend on luck , 70 % depend on.hard work. Sometime up , sometime down . Good luck , bad luck.......
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Stocksafeplayer My dear @pjseow….. got Hokkien song
“Oo si kee…….Oo si low…

Stocksafeplayer, yes agreed. No crisis in supermx. FY2022 can still.make billions. Even FY2023 , when ASP was assumed by IB to be US 25.5 , the profit can still hit 882 millions based on consensus.

monetary , you are right. I should not take the financial crisis as comparisons. During the financial crisis, bank almost went bankrupts and many companies lost millions and billions. Malaysian government had to form Danaharta and bought all the NPL from banks to prevent them from going bust. US government had to rescue the banks by doing QE S. The scenarios affecting the gloves industry are not financial crisis. In fact it is not a crisis at all. Glove.companies are making unprecedented billions. The big4 are cash rich giving good dividends . Capacities expanded without borrowings. The only " issue " is ASP coming down after going up 4 to 5x. This is expected anyway .Since it is not a crisis, I think it will recover much much earlier than my 3 earlier examples which were REAL Financial crisis. Thanks again .

Tonee, the sentiment for gloves are still bad . I will wait a little longer for the fear to subside before entering.
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ToneeFa Yup pjseow, agree with u. Those with capacity can still nibble as it dips. I m keenly watching if SpmX can win the ongoing NHS contracts tender, which I think is an important contract to SpmX to proof of that their OBM setup can give them an edge over the rest.
14/09/2021 5:17 PM

Markets will swing between overly optimistic or greed and overly pessimistic or fear. The recent meltdown of gloves stock reminded me of 1998
asian financial crisis, the 2008 US financial crisis and last year March pandemic crisis. The Asian crisis.was the worst with Composite index went down from 1300 in 1997 to 250 in 1998 within a year. Our PM then banned stock shorting completely and Singapore was not allowed to trade Malaysian stocks. Malaysia implemented currency control so that our.ringgit cannot be shorted . Rates was fixed.at 3.8 .The CI index took 1.5 years to recover to 1000 and then another 3 years to reach 1300.
The 2008 financial crisis also resulted the index dropped from the high of 1500 to 800 plus.
Many stocks dropped more than.50 % It also takes about 2 to 3 years to go back to 1500.
Last year March meltdown from 1800 to 1400 also made most stocks down 30 to 50 % but the recovery was much faster. It recovered within 6 months.
These 3 meltdowns and recoveries gave us.a.good message. Markets can be irrational but it will goes back to the fundamental values.
I am lucky to witness these 3 big crisis in.my life and.happy to share my experience.

skyu , this number comes from IBs not from me. I just quote their numbers and compare with the factual PAT in FY 2019. This is not my forecasting. Do you understand English?
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skyu aiseh pj siao , lu still day day come here and promote gloves,? go promote number forecaster company ma.
14/09/2021 3:03 PM

Based on IB UOBKayHian latest report dated 8 September , it showed a consensus PAT of 882 millions for supermx in FY2023. Its assumptions of normalised blended ASP is US 25.5 per 1000 and nett margin of 15.1 %. It also assumed a capacity of 36 billions pcs. p.a.
FY 2023 will start in mid CY 2022 which is 9 months from now. The assumption of ASP 25.5 is lower than the 30 to 35 which Harta CEO Kuan mentioned in HARTA AGM.
The 882 million profit is 882/124 = 7.11 times higher than pre pandemic profit of 124 million.
Will the market give the same.price to supermx when.its earning is 7.11 x the pre pandemic price ? Pls note that supermx will be a much stronger company in terms of cash position , capacity and its new business model . The IB also assumed a flat.ASP of 25.8 and.a lower nett margin of 14.6 % in.FY 2024.

Well , despite this consensus number from IBs , Money maker will.still continue his BS of 65 sen pricing post pandemic.

Stocksafeplayer, I saw you posted hundreds of advice and opinions in Genting and some in Topglove and supermx. You also like and agreed with Moneymakers advice that supermx will go down to 65 sen. I saw a few of your postings in Genting , Topglove and supermx were removed. Why ? You violated SC or i3 rules ?

The Chinese government is STRATEGIC in thwir long term planning not short term type. The.super.duper ASP foe gkoves will.last for 2 to 3 years only. Then it will goes down to more reasonable numbers like US 30 to 35 . I do not think China government will come up with funds to subsidise their glove industry which is too small and does not have long term impact on their economy and technological advancements. Semicon has long term implications for automobile, telecommunications, military , AI and space explorations.

I find it amusing that we are so afraid of China in gloves mfg when we are at dominant position with 65 % market share but completely ignore the Assembly and Test competitions from both.China.and Taiwan which they are leading compared with Malaysia. Taiwan has 300 plus IC design houses and hundreds of Assembly and Test houses. China has equal numbers and may be more . Malaysia is just a tiny players in semicon Assembly and Tests industry . Why are we not afraid of both Taiwan and China which are big taikors in semicon industry. China has.announced multi billions of funds helping the semi con industry but I have not heard of any such funding from Chinese government to help the glove industry. I think investors should worry more on semicon than gloves in terms if china competition.
China is venturing into graphene replacing silicon when Moore Law reach its limit with 2 to 3 nm . The test and assembly will be a conpletely different ball game then. Is Malaysia semicon industry prepared for that ?

When we talk about semicon industry, we need to seperate IC.Design and chip manufacturing with Assembly and Test. The real techonolgy and know how is from IC and Packaging Design and Chip manufacturing which requires state of the art software and hardware. Malaysia semicon is mainly in Assembly and Test plus test equipment manufacturers which are not as high tech. MPI , Unisem , Globetronics , Inari and JHM are mainly subcon houses for test and assembly. There are hundreds or may be thousand of such test and assembly in China Pearl River Delta alone.

An article showing Malaysian government has been supporting our rubber glove industries all this while. Our competitive advantage is not by chance but active government supports.
Can someone show me how the China government support their glove industry to the extent of selling gloves below cost ?
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https://www.aseanbriefing.com/news/getting-a-grip-on-malaysias-rubber-glove-industry/

Malaysian government has been.supporting our rubber glove industries all this while.
--------------------------------
https://www.aseanbriefing.com/news/getting-a-grip-on-malaysias-rubber-glove-industry/

kbtsyl168, agreed with you. The big4 will aggresively defend the market share by lowering the ASPs since they have the good margins. The other intention is to deter.new comers from.coming in . I believe Malaysia has the competitive advantages compared with the Chinese glove makers. Malaysia has
1. lower cost of natural gas which contribute 15 % of the total cost
2. lower electricity cost. In fact supermx had already started the solar project
3. The big 4 can expand their capacities without borrowings. The many billions made will be able to fund big expansions which China glove makers need to borrow. Hence their cost will be higher.
4. Malaysia has better glove supply chain and eco system becauce of world leading positions in the last 20 years. We have economy of scale which China does not have.
The aggressive ASP reductions by the big 4 serve as a warning to new Chinese players. Once these new players are slaughtered , the ASP will rise gradually again.

Supermx Actual and Projected Earnings

FY2019 Actual (12 months prepandemic)

PAT 124 millions
ASP US 20
Nett Margin 8.3 %


FY2020 Actual ( 8 months prepandemic and 4 months during pandemic )

PAT 526 millions
ASP US 25
Nett Margin 25 %

FY 2021 Actual ( 12 Months pandemic )

PAT 3880 m inclusive of 75 m donation
ASP US 77.5
Nett.Margin 54.2 %

FY 2023 Projected Stabilised Period

PAT 1056 millions
ASP US 30
Nett Margin 27.5 %

based on 36 billions capacity

Will Supermx drop to.pre pandemic price based on FY 2023 projected PAT by IBs ?

handsome newbie, gloves investments were not
started one year ago at 12 only . Gloves investors started investment before that and also after that rm 0.1 , 0.2 ,0.3 ,0.4, 0.5 ......1.0, 1,1 ,1.2.1.3. 1.4 ,1.5..........2.0 ,2.1, 2.2, 2.3,2.4 ...........3.0, 3.1, 3.2,......4......5......6.....
.7....8......9.......10.......11......12......10.....9......8....7....6.....5,.....4......3...2.9....
Out of so many investments at so many different prices, why are you so.selectively picking the highest point and omit the other numbers and make your stupxxd and biased conclusion that glove investment is no good.?
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handsome_newbie where are those ppl always said glove is good... from price 12 till now 2 ++ still happy ? haha
12/09/2021 6:29 AM

kbtsl68, good analogy. I am also seeing hotel receptionists, airline stewardess, customer.service personnels, waiters and waitresses, cashiers are wearing gloves during their routines. More and more peoples are aware of the hygience and potential infections through touch and contacts. Gloves usage.in developing countries with huge populations will grow . The lower ASPs will.accelerate.the growth of gloves in post pandemic era.

Boston, it is not true that glove barrier of entry is low especially Nitrile gloves which require R&D to make quality gloves. Quality.is key and they need FDA Approval to enter North American and Europen.markets. Gloves are.also volume games. You must have economy of scale. When ASP come down to 30 to 35, the small players with less than 10 billions capacity may have very little margins or even losing money especially if they borrowed to install the capacities. The unit cost in.US and European countries will be even higher . When ASP touches US 30 , I forsee demands from.developing.countries will rise exponentially with per capita usage going up from the current average of 10 to 20 to more than 50 . Currently., per capita usage for developed countries are between 150 to 250. The world average per capita is about 50 today . With a population.of about 8 billions, the demand was about 400 billions . If the growth rate is 12 % , the demand will.double to 800 billions in 6 years using the 72 rule. The room for growth is still very big.
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Boston Pjseow. I think you’re right that asp will be stabilizing around range between 25-45….what’s worrying is supplies overwhelming demands. Even USA also building glove factories and I’m sure lots of countries also building. It’s a very low barrier to entry industry. Very cash rich company but with very low share price. That’s happening now.
10/09/2021 10:10 PM

Dont be frightened and fooled by the phrase ASP and profits are coming down and super earnings are over. Since the.markets and investors are using pre pandemic as reference point , ASPs of US 30 to 35 at stabilised state in middle of next year is still 40 to 50 % higher than the prepandemic ASP of US 22 to US 23 for Nitrile gloves. Besides , the.capacities are also 40 to 50 % higher correspondingly. These two factors combined give more than 8.5 X.earnings in FY 2023 compared with FY 2019 pre.pandemic period.
There is no drop in ASPs and no.drop in Earnings if you take pre pandemic as reference point.

From FY 2023 onwards , even the ASP remain flat.at US 30 for one or two years, there is still.growth in.earnings because of capacity expansion.. FY 2023 capacity is about 36 to 40.billions because FY 2023 starts from.middle of CY 2022.
Dont use the peak ASP and peak earning as reference .Think of it this way.. When.the ASP continue to move up from September 2020 to the peak in.middle of this year , the share prices did not move in tandem with the improved ASP and record record PATs . In fact , the share.prices.moved downwards .

We should Compare the FY 2023 dividends , nett cash, nett margins ,capacities , ASP. and PATs with pre pandemic vs FY 2023 . This will give you a better perspectives of supermx 's Growth., growth., growth and growth in every aspects.

With Harta CEO announcing that the extraordinary period of super earnings coming to an end to a stabilised normalised ASP in Calendar YEar Q1 2022 , the market reacted very negatively like end game for glove makers . It is important to rationally look at what has been the growth rates for the big4 glove makers from pre pandemic FY2019 to FY2023 . THe FY 2019 PATs were Actual numbers while FY 2023 are consensus projected PATs .
I have computed the PATs for the big 4 and estimate their CAGRs .

Topglove

FY 2019 Actual PAT 371 millions
FY 2023 Projected PAT 2203 millions

Total Growth for 4 years = 2203/371 = 593 %
CAGR = 56 %

Hartalega

FY 2019 Actual PAT 434 millions
FY 223 Projected PAT 1493 millions

Total Growth for 4 years = 1493/434 = 344 %

CAGR = 36 %

Kossan

FY 2019 Actual PAT 224 millions
FY 2023 Projected PAT 670 millions

Total growth for 4 years 670/224 = 299 %

CAGR = 32 %

Supermx

FY 2019 Actual PAT 124 millions
FY 2023 Projected PAT 1056 millions

Total Growth for 4 years = 1056/ 124 = 852 %

CAGR = 71 %

Summary

The above computations show that the big 4 have an earning growths of 299 % to 852 % and CAGRS of 32 % to 71 % . These growths are unprecedented and enabled the big 4 to increase their capacities without any borrowings and also paying fat dividends besides being nett cash in FY 2023 . Based on MAARGA projections , the growth rates during post pandemic will be between 12 to 15 % .
The big 4 glove makers have obviously benefited from the good growth rates for the 4 years even though I intentionally linearise them such that it is a continuous growth rather than the Actual Bell Curve growth which actually are much higher mathematically . The FY 2023 PAT projections are from the IBs with ASP assumptions from US 30 to 35 for Nitrile gloves. THe blended ASPs are different for different Glove makers depending on their Nitrile to Latex ratios .
In my opinion , the growth rates for the big 4 from 2019 to 2023 can rival top semicon or technology companies in Malaysia . The big 4 has been profitable for the last 20 years even before pandemic and growing with double digits . Malaysia has been proud to be the number 1 suppliers of medical gloves in the world for the last 20 years . It is with sadness that the big four have different fate compared with the semicon sectors which are definitely not world leaders . I hope that the market and investors will take a more rational look at the real numbers .

I welcome any civilised comments .

Disclaimer : THe above write up is not a buy or sell call . It is intended for sharing for glove investors .

Yesterday Harta briefing had created havoc on the market prices of all glove makers today . Harta price dropped to 6.68 . This price minus the good dividends ( 17.7 s + 19.75 + 70 s ) is almost at the pre pandemic price . What is so shocking with the briefings ??? Is it because of the ASP dropping to stabilised state in CY Q1 2022 US 30 to 35 ? I read a latest IB report dated 8th Sept with the projections of consensus earnings in FY2022 at 3986 millions and FY 2023 of 1493 millions .
The FY 2020 pre pandemic earning was 434 millions .If we temporarily "forget " the huge extraordinary growth in FY 2021 and FY 2022, there is a 3.44 x growth of earnings from FY 2020 to FY 2023 . This is like 50 % growth per year or CAGR from FY 2020 to FY 2023 . This growth is even better than the growth before pandemic . Why panic as though it is end of the world . THe market has been BRAINWASHED so much that peoples stop thinking rationally .
Do we give same pricing to a stock which earn 3.44 x in three years from 2020 to 2023 while earning 7 billions in FY 2021 and FY 2022 ( between FY 2020 and FY 2023 ) ? These super earnings has enabled Harta to increase it capacity to more than double without borrowings and at the same time give a generous dividend of 60 % of the earnings . The semicon stocks would have easily double or triple the pricings with such performance .

Tonee, thank you for your support. Shareinvestor888 has no right to stop me from voicing my opinions and assumptions. He is free to comment if he disagree with my assumptions and share his. This is a public forum.
---------------------------
hey shareinvestor888, if you don't agree with pjseow calculation bcos u think its wrong, then pls show ur proof of why he is wrong, Just bcos u don't like his calculation doesn't mean he is wrong. Many of us, including me look forward to his calculations to form an idea. We decide for ourselves if he got it right or wrong. We may not accept every basis of the calculation but it gives us a basis to compare our own assumptions. So can u pls think more maturely and do ur own assessment of other ppl opinion and rationalistion. If you have the tendency to accept everything you read at face value, pls assign a guardian to monitor u while u surf the investment forums, so u can get proper guidance before u make any investment decision. Also, even if a calculation or opinion is from a "qualified" analyst, I will still not accept it at face value.
08/09/2021 3:15 PM

MMM , your.assumption of 500 m profit last qtr without calculation was 100 % off lah. My assumption of 1 b was much closer than the 959 millions profit .It is ok if shareinvestors888 prefer your assumption of 500 millions without calculations and zero basis. I have no problem if he ignore mine and embrace yours.
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MoneyMakers Just ignore pjseow & his nonsense assumptions..will save u alot of money

Same clown that promote hengyuan @ rm18 top of the hill
08/09/2021 1:54 PM

All the participants in i3 forum are their personal views including yours. Why cant I have my personal views in this forum ? Did i3 rules mentioned that participants cannot use calculations to substantiate their views? Do you mean it is better to pluck a number from the air without any calculations ? Pls tell me which of my assumptions are unfounded?


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

shareinvestor888 I don’t think it’s a good idea to perform your own personal calculations & mask them as yr own personal views in this public forum. Disclaimer does not mean you can perform analysis based on unfounded assumptions unless you are holding an analyst role somewhere.

I will ignore if you do not advertise your calculations in this public forum
08/09/2021 1:23 PM

shareinvestor888 , Is there a new rule in i3 that I cannot share my views ? Anything wrong with my calculations? pls comment . I did put a disclaimer that it is not a buy call or sell call. My intent is for sharing. Just ignore if you think it is not useful for you.

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

shareinvestor888 Don’t ask @pjseow’s entry prices la.
But @pjseow should not post his calculated target price if he is not representing any investment houses or have any investment adviser licence. I am a serious supermx investor
08/09/2021 12:44 PM

Read properly lah. I just give my entry prices at various time and various level. 3.05 was my last entry lah. It is not my average prices for all the entry prices. It is difficult to calculate the average entry prices of all my entry for the last 13 years. I think it will be less than rm 1 lah .

----------------------------
investmalaysia7777 pjseow average is 3.05 a month ago??? you bring down average from 3.6 to 3.05? Supermax only once or twice drop to that level for the past few months. and immediately rebound. you bought using hell notes ah? don't talk nonsense la. we all know you telling lies.
08/09/2021 12:37 PM

Maxsuper, why are you so stupxxd ? How can someone know my entry prices which is confidential. Since you are so busybody and kepochi , why dont you ask me direct what were.my entry prices. My
entry prices were 0.125 in 2008 , 0.5 in 2013 , 0.7 in 2019 , 3.2 in 2020 , average 3.6 a few months ago and 3.05 a month ago. You want to know my selling prices in 2010 , 2014 , 2020 and 2021 also ?
---------------------
Maxsuper ...... can someone tell pjseow entry price again?
08/09/2021 11:54 AM

While the markets or many short term investors might look at Harta briefing as bad news , I consider the briefings as good news .
I had anticipated the ASP to come down a few months ago and had prepared a few worst case scenario valuations using ASP of 24 , 25 and 30 . Harta CEO Kuan's statement that the ASP will stabilised at US 35 comes as a good news although it comes faster than expected . This is good because it will deter newcomers from coming in . Since glove is a volume games , many newcomers who started their ventures last year or beginning of this year will not make any money and may go bust next year. The excuse of oversupply because of newcomers will no materialise .

In FY2020 ( 8 months of prepandemic from July 2019 to Feb 2020 and 4 months of pandemic from March till June 2020 ) , Supermx has a revenue of 2131 millions and profit of 526 millions . Nett Margin was 24.7 % .
Assuming a capacity of 24 billions per year and utilization of 85 % , the ASP was 2131/4.2/24/0.85 = US 24.9 .

In CY 2020 , Supermx will have a capacity of 36 billions p.a
With ASP of US 35 ,utilization of 85 % and using a conservative 25 % margin even though the ASP is US 10 higher than FY2020 ASP ,

Projected Earning = 35 x 36 x 0.85 x 4.2 x 0.25 = 1125 millions

EPS = 1125 / 2720 = 0.413 or 41.3 sen

Since the ASP is in stabilised state , a historical PE of 15 is assigned .

Tgt price = 0.413 x 15 = RM 6.2


From then on , there is no more ASP coming down and oversupply from new comers . With the ASP of US 35 , the big 4 can compete rigorously with China new glove makers especially those Nitrile glove makers . At this price , it will spur more demands from the developing countries who are still at below 30 per capita usaga per year compared with 200 from the developed countries like US ,Canada and European countries . With the pandemic still on going , glove will grow at a rate of 12 to 15 % post pandemic based on MAARGA projections .
It will be a growth story from then on . Meanwhile enjoy the good dividends .

Disclaimer : My write up is not a buy or sell call . It is intended for sharing for serious supermx investors .

Harta briefing from in Chinese from Nanyang.
Harta approved the 19.75 dividend and maintained the 60 % dividend policy. Expect another 40 sen dividend next qtr .Capacity will increase to 63 billion in 2023.

https://www.enanyang.my/%E8%B4%A2%E7%BB%8F%E6%96%B0%E9%97%BB/%E6%89%8B%E5%A5%97%E5%94%AE%E4%BB%B7%E5%8D%8A%E5%B9%B4%E5%86%85%E6%AD%A3%E5%B8%B8%E5%8C%96-%E8%B4%BA%E7%89%B9%E4%BD%B3%E8%B6%85%E5%B8%B8%E7%9B%88%E5%88%A9%E5%B0%86%E7%BB%93%E6%9D%9F

papasmurf, thanks for your excellent short write up which highlited the moat of supermx.


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Everyone can make glove but there is more to glove than you think. Not everyone can make gloves the way the big 4 do. There are advance science and R&D behind the gloves. But everyone can operate an online gaming business. That is not rocket science.
08/09/2021 6:23 AM

A good article for glove investors. Malaysia being leading producers of medical gloves is not by chance. Government supports in terms of incentives, subsidies of natural gas , R and D and automation incentives helped the glove makers to lead the world in terms of innovations such that Malaysia remain competitive in glove manufacturing.

https://www.aseanbriefing.com/news/opportunities-in-malaysias-rubber-glove-industry/

emsvsi, why dont you look at the stock price and earning of Genting 10 years ago and then compare them.with end of 2019 . See how.much growth Genting produce. Then you do the same for Topglove and Harta . Tell me with facts how much Genting share prices has drop in the last 10 years and how.many x harta and topglove share prices has grown.
Genting has zero growth in.earnings in the last 10 years whereas Harta.and Topglove grow more than a few x. Genting shares prices had dropped 50 % whereas both harta and topglove had grown a few x.
I intentionally exclude 2020 and 2021 which were hit by pandemic so that the comparisons are fair.
Talk with facts .

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emsvsi Gloves: Anyone can do, even those companies from entirely different sectors with no experience whatsoever, let alone those from the world's factory, China

Vaccines: mRNA-based, only a few have the proprietary technology

Genting (3182): Only 1 in Malaysia; 1 of 2 in Singapore. The gaming licenses are exclusive and form an impenetrable moat

What everyone can do, has little value
What only a few can do, is priceless

Investing is a wonderful experience and ultimately rewarding when you are able to see things clearly

Sincerely,
EMSVSI

https://www.bloomberg.com/news/articles/2021-09-07/malaysian-glove-makers-face-challenge-from-china-hartalega-says
07/09/2021 11:24 PM

niet This is a forum for supermx in case you lost your way to the mountain.
07/09/2021 11:50 PM
pjseow
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There are 2 good things which come out from Harta briefing . First the ASP are easing and will stabilise in Q1 2022 but will not drop below US 35. I had computed various scenarios in my earlier postings with ASP s from US 24 , 25, 30 which were lesser than 35 at normalised stabilised states. These scenarios can still give a values of more than rm 6 for supermx.
The other good thing from this briefing is a deterrent from new comers who may think that the super high ASP will be forever. It will be suicidal for the new comers to venture into glove mfg when the ASP will drop to 35 in a year time. Even those smaller players who had started the venture last year or this year may go bust in a year time. The over supply.issue is overblown.
In.a few months time , you can.hear IB.singing a different tunes once they collected enough at current low prices.

Stealth ,agreed with you. In stock investment , we must buy low and sell high. The IB s actually advocate buy high and sell low. Last year when the PE were sky high of mote than 100, they give EXTREMELY high TP and gave buy call . Now when the stocks had come down 70 % from the peak with PE less than 4 , they give EXTREMELY low tgt prices and give a sell call .


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Stealth IBs have been conning retailers with extreme TP of rm100, 50, 40 when they were actually selling. Now they want to con us with an extreme TP o 2.50, 65sen, when they are actually collecting. This is their modus operandi. Just be aware!!.
07/09/2021 6:21 PM

The glove companies fundamentally weak ? Making billions per qtr fundamentally weak ? Cash rich and Giving fat dividends fundamentally weak ? What about Genting and Airasia which lost billions fundamentally.strong ?

https://www.theedgemarkets.com/article/three-questions-hartalega-boss-groups-media-briefing-today

Kossan went up 19 sen on 11th August , one day before ex date for 12 sen.dividend entitlenent. Will supermx goes up 20 sen tomorrow which is one day before ex date of 15 sen dividend entitlement?

AdCool, yes , 48 billions by end of 2021 is aggressive . I think we should be fine if the 48 billions is achieved in 2024 with.ASP of US 25 to 26 . We can assume 42 billions in 2023 with an ASP of US 30 which both Kenanga and CIMB are projecting. These assumptions in 2023 still give a higher earning than 2024.

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AdCool I think should give some buffer and discount as past experience showed that Supermax may not be able to expand up to 48 billions capacity by 2023. In addition, the management can always delay the expansion if the ASP drops significantly

Stealth, dont worry, with the 2 superb dividends of 28 sen , Stanley and wife has about 300 mil cash. He may wait for another 2 more dividends to make his move to buy up the shares and increase his holding %. He knows supermx value better than us. We have to be patient and wait for the show. Meanwhile enjoy the dividends.


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Stealth Why not form a barricade at 3.10 for the balance of the RSS. How many more lots required to make exactly the 4%.If we can have the numbers to participate, my god it will be history created in klse!!! Mission Not Impossible.
06/09/2021 7:05 PM

Tonee , thanks . The assumption is based on.ASP coming down to US 25 which was the ASP of FY2020 . Pls note that FY 2020 comprises of 8 months non pandemic and 4 months pandemic period. The consensus stabilised ASP among glove makers , MAARGA and IBs are US 30 to 35 post pandemic. You can see that even at US25, supermx can generate about 1 b profit per year which is about 8 to 9 x of prepandemic profit. Yes. the tgt price of 7 is considered fair . In fact this was the average tgt
prices given by 6 Ibs after Q3 result was announced in.early May. They slasshed the tgt prices unreasonably by more than 50 % although everyone stated that the recent Q4 result was.within their expectations.

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Thanks pjseow for your meticulous calculations. I have to repost your calculation proof here as reminder to all genuine SpmX investors. So base on your calculation, what it means is that at post pandemic, SpmX should be looking at PAT of RM 1b = 0.36 x PE15 = RM 5.50 min. ( not taking into account the many billions of cash in hand that can generate few hundred millions of interest profit and also the many rounds of dividends to be issued over the next few years). I believe all in we should be looking at tgt price ard 7.0 .
06/09/2021 3:09 PM