Posted by numis71 > 2020-04-02 20:38 | Report Abuse

Good analysis, well done.

Posted by Mat Cendana > 2020-04-02 23:29 | Report Abuse

This is one of the most interesting posts here which deserves at least more views. Regardless of whether one agrees with the content, the writer had put in a lot of effort here. Thumbs up for adding quality to this website.

Posted by ahbah > 2020-04-04 11:37 | Report Abuse

I no know how to analyse n therefore offer no views.
But bcos of the worldwide spread of covid-19, all healthcare products are facing severe shortages like gloves, ventilators, medicines etc.

all healthcare counters ... BUY

Posted by Rishi > 2020-04-17 01:37 | Report Abuse

Hey dude, where is the source you got the diluted EPS or it was from your own calculation?

Posted by Kaviyarasu > 2020-04-17 01:44 | Report Abuse

Hi @Rishi, the figure was obtained from S&P Capital IQ. I am not able to share here the screenshot from the platform which would give you a clear picture on the calculation.

Posted by char1234 > 2020-04-17 02:28 | Report Abuse

I can't see anything at all

Posted by char1234 > 2020-04-17 02:29 | Report Abuse

what's the target price or fair value considering running at max capacity

Posted by Kaviyarasu > 2020-04-17 02:38 | Report Abuse

Hi @char1234, I wouldn't be able to fully answer your question because I used relative valuation method to value the company. Relative valuation is finding a range of fair value of a company based on comparable companies which have similar business risks. Nevertheless, a simple answer to your question would be as follow. Assuming a 10% increase in net income, diluted EPS will then be 0.058 x 1.1 = 0.0638. Applying the min PE of 21.8x, the fair value will be 1.39.

Posted by Rishi > 2020-04-18 16:55 | Report Abuse

Thanks Kaviyarasu for the clarification and indeed you are right. I did some research that the value you written there are correct.

Somehow, i do have little confusion here, on the Average P/Diluted EPS LTM --> 31.83x 21.8x (Supermax) 29.0x (Kossan) 44.7x (TopGlove

How do you get the P/E ratio value here : I just did a little calculation to make sure my understanding is correct :

As to date of your article 30th march 2020 , For Instance the E/P (supermax) = RM1.73 / (4.21/100) = 41x instead of 21.8x as mentioned above.

* E/P = Share price / diluted EPS
* price of supermax on 30 MArch 2020 = 1.73

Even i tried to calculate with 21.8 the price would be RM0.91 which i don't think suppermax was in this price range for the past one year.

You explanation is very much appreciated.

Thanks for the explanation replied to char1234 and gave me good understanding as well.

Posted by DickyMe > 2020-04-18 17:01 | Report Abuse

This is one time demand injection to the business due to the pandemic.
Not worth for long term.

Posted by Rishi > 2020-04-18 17:07 | Report Abuse

My bad you are right, just our financial info my slightly different. I calculated with only half year/2 quarter plus my price is 1.73. Mind sharing at what date did you do the calculation.

Somehow, i do have little confusion here, on the Average P/Diluted EPS LTM --> 31.83x 21.8x (Supermax) 29.0x (Kossan) 44.7x (TopGlove

How do you get the P/E ratio value here : I just did a little calculation to make sure my understanding is correct :

As to date of your article 30th march 2020 , For Instance the E/P (supermax) = RM1.73 / (8.42/100) = 20.54x instead of 21.8x as mentioned above.

* E/P = Share price / diluted EPS
* price of supermax on 30 MArch 2020 = 1.73

Even i tried to calculate with 21.8x the price would be RM1.83 which i don't think suppermax was in this price range for the past one year.

You explanation is very much appreciated.

Thanks for the explanation replied to char1234 and gave me good understanding as well.

Posted by BornToSpeculate > 2020-04-18 17:18 | Report Abuse

You know what is interesting. Glove companies never had much excess capacity even before COVID. They were always building to accommodate future growth and this always takes time.

If every industry whether steel or manufacturing related needs time to increase capacity, glove is no different. each line to refit or add takes potentially 6mth end to end ( from ordering new machinery line, construction, production, test-run, etc ) to 2 years if its a new building. So if demand does increase, are we correctly factoring that these new profits can be recognized immediately.

Also, i think u guys really don't know glove industry and simple analyze. Today, if u got excess capacity, you can sell to anyone at all. All the medical buyers take time to evaluate your product and do factory audit which normally takes 6-12 mths to complete before they can place an order. Most large companies these SOPs in place and cannot bypass these processes. It is because of this, buyers try not to change suppliers due to lead time taken for all this due diligence and audit and also buyers do sign contracted prices with glove manufacturers. So uptrend in demand doesnt mean glove companies make more. Buyers will also ask for price reduction every quarter when they find latex / nitrile prices go down. So dont wrongly jump into the wrong conclusion.

Also, my observation but more ppl are buying face masks and sanitizers instead of gloves

Posted by Kaviyarasu > 2020-04-18 17:28 | Report Abuse

Hi @Rishi,
I think you are almost there in terms of the calculation. I will try to explain the 21.8x P/E of Supermax. As I mentioned earlier, the P/E calculation is based on LTM (Last Twelve Months). The latest financial report that Supermax published is for the quarter ending 31 Dec 2019. Hence, twelve months would be from 1 Jan 2019 - 31 Dec 2019. If you add the net income for all the four quarters in 2019, the total net income would be 34.6 + 14.4 + 24.7 + 30.2 = 103.9M. The weighted average diluted shares outstanding is 1307.87M. Hence, diluted EPS would be 103.9/1307.87 = 0.079.

As the price on 30 March 2020 is 1.73 (you mentioned this earlier), the P/E will be 1.73/0.079 = 21.8x. I am sorry if there are some discrepancies in the numbers due to rounding off.

Posted by Kaviyarasu > 2020-04-18 17:33 | Report Abuse

Hi @DickyMe and @BornToSpeculate,
I totally understand your point of view and that is why I didn't incorporate any growth in my numbers. Assuming the company continue to operate as it is before the whole crisis (which is why I didnt include the growth in demand), there is a huge discount to its price as at 30 March 2020. I was pointing out more to the mispricing rather than the growth of the industry and the company.

Posted by BornToSpeculate > 2020-04-18 17:53 | Report Abuse

haha if you take out future growth then how to analyze and compare those with higher PE. High PE means high growth story, then your analysis will only be skewed that the lowest PE is the best buy

Posted by JN88 > 2020-04-18 17:56 | Report Abuse

COMFORT gloves production 4.1 billion pieces.....KOSSAN 32.5 billion pieces....!!!!!!TOPGLOV 90 billion pieces HARTA 44billion PIECES....lol comfort con your bird...

Posted by i3lurker > 2020-04-18 18:00 | Report Abuse

people dun bother about max production some say RM50 TP even

just simply buy

Posted by Rishi > 2020-04-19 00:00 | Report Abuse

Thanks alot @Kaviyarasu. Perfect and you done a good job on tabulating the tables.

BornToSpeculate --> I never had such thoughts from the beginning. I don't deny the part of evaluating your product before using of those. I had this thought while reading on SOP and procurement management process. You are totally right. Plus, rubber has been getting cheaper as time goes on. Surely, they would seek for more discount.

well, I don't deny that when the supply is very urgent people might bypass it or those surplus in the production is the early profit.

Anyway, what i can see now is market sentiment rather than fundamental.

Posted by BornToSpeculate > 2020-04-19 11:58 | Report Abuse

Im just sharing on the analysis part and not saying you wont make money. Due to sentiment it will likely go up still coz alot of funds just follow the herd and depend mainly on insider trading. Its a sickening truth thats why I will never buy into a fund.

Its the same thing for so called Tech stocks. I actually knew quite a few these before like DUFU, UWC, etc. But seriously these are not TECH companies. There are no patents, no intangibles, what technology are they referring to. They are just a sub contractor that does some design & build. They use CNC machines + metal stampign to do metal casings for assembly test equipment. You could do it too if you get the contract and buy the machines.

IF they supply to NASA Aerospace, now that ill say its tech then

Posted by Targeted > 2020-05-07 19:21 | Report Abuse

Comfort has done well so far. However fr new guys its very hard to compete with big 4 who are leaders of one of Malaysian world class industries. There is a reason why they are still worlds top 4. They hv had well controlled and consistant growth over many years. If possible to take over dominance easily, trust me China would hv taken over long ago!!!!!