Posted by qqq33333333 > 2020-05-23 01:48 | Report Abuse

hottest thing in town...all welcome to speculate............

Posted by Choivo Capital > 2020-05-23 03:28 | Report Abuse

Glad it was useful for you.


====
probability Good info which i was actually trying hard to figure out earlier. Thanks Jon!

Posted by CharlesT > 2020-05-23 06:43 | Report Abuse

It took me a long while to adjust my mentallity towards koon bee play..

U r younger than me i hope u r less stubborn than me too

Making money is rule no 1 in stock mkt

Posted by Philip ( buy what you understand) > 2020-05-23 07:10 | Report Abuse

I hope your post is not saying what I think it is sharing. That everyone should be buying more glove stocks with made up numbers of suddenly pe10. The ability to rationalize is to know when to go against the herd, and when they are leading you to water. This requires you to put ego out the door.

In any case, I have sold my entire long term holdings in topglove, my second longest holding. When everyone is asking silly prices for my stock, it is time to head out, and find out where everyone is forgetting.

You are welcome to join a telegram group my daughter set up for me, tme/philipcapitalmanagement

Posted by Sslee > 2020-05-23 08:55 | Report Abuse

Haha Ahchoi is saying he spends night and day reading all the foreign companies annual report and bought:
1) Google
2) FB
3) Stoneco
4) Berkshire
5) Master
6) Visa
7) Aercap
8) Netflix
And day-dreaming “Should I talk about yesterday? When I found out that it was that precise moment, where I made the correct decisions to not to throw all caution to the wind, and jump in with nothing but my underwear left, was the absolute bottom? (My thesis was that margin and forced sales are over, and its time to buy, it appeared to be accurate). And that if I had done so, i would likely not need to head back to the office come the end of the movement restriction, with so many of my high conviction purchases up by 200-300%.”

But miss our “Jaguh Kampung” glove stocks that actually went up 200-300% in 1 month. So he still heading back to the office after the MCO

Posted by probability > 2020-05-23 09:09 | Report Abuse

I think Philip did the the right thing to sell Topglove........but he should be buying Supermax

Posted by supersaiyan3 > 2020-05-23 09:20 | Report Abuse

Eh, it depends on its a one off event or a permanent change. For some companies i believe its a permanent change, for others is only a one off event. When this is over, who will still be running at full capacity?

Posted by CharlesT > 2020-05-23 09:20 | Report Abuse

can last for 2 FYs

Posted by probability > 2020-05-23 09:23 | Report Abuse

If you go to any pharmacy (my experience in overseas), they sell you gloves in boxes, if you check the brand, it has a local company name.

The name is something that you have not heard of - no connection to Malaysia, but the gloves are definitely from Malaysia.

This shows the distributors buy from Malaysian glove makers and hike up with a significant margin to make money themself (likely much higher margin than the manufacturers).

As such, if you can have your own brand (OBM) like Supermax, it would certainly make a huge difference on profit.

Most importantly, it means Supermax has the competitive advantage of killing other distributors (competitors) being the manufacturer themself.

This vertical integration is indeed very powerful.

There would be no reason for PE rating of Supermax to be not comparable to other big players like HARTA

Posted by probability > 2020-05-23 09:37 | Report Abuse

May be Supermax should buy a Rubber plantation too, so that they can have their own latex - will be useful to gain competitive advantage at times when oil price shoots up raising raw material Butadiene price (synthetic rubber)

Posted by Philip ( buy what you understand) > 2020-05-23 09:42 | Report Abuse

This post below is the reason why I'm holding on to QL and selling topglove. Is you opinion that I should be buying Supermax based on greed and fomo? Or based on intrinsic value and looking term growth.

The prices now are speculative prices with future earnings baked hard into current prices.

I prefer to buy companies selling at a nice relative valuation to future prospects.

Or you believe the prices, volume and demand will go higher and at the same rate 5 years from now? That earnings will continue to quintuple next year and stay that way, and shortage will still be unresolved years from now?

>>>>>>>
supersaiyan3 Eh, it depends on its a one off event or a permanent change. For some companies i believe its a permanent change, for others is only a one off event. When this is over, who will still be running at full capacity?
23/05/2020 9:20 AM

>>>>>>>
probability I think Philip did the the right thing to sell Topglove........but he should be buying Supermax
23/05/2020 9:09 AM

Posted by Philip ( buy what you understand) > 2020-05-23 09:44 | Report Abuse

This level of speculation and greed is horrifying. Can you really think that harta performance and Supermax performance over time is comparable?

>>>>>>>>>>

probability If you go to any pharmacy (my experience in overseas), they sell you gloves in boxes, if you check the brand, it has a local company name.

The name is something that you have not heard of - no connection to Malaysia, but the gloves are definitely from Malaysia.

This shows the distributors buy from Malaysian glove makers and hike up with a significant margin to make money themself (likely much higher margin than the manufacturers).

As such, if you can have your own brand (OBM) like Supermax, it would certainly make a huge difference on profit.

Most importantly, it means Supermax has the competitive advantage of killing other distributors (competitors) being the manufacturer themself.

This vertical integration is indeed very powerful.

There would be no reason for PE rating of Supermax to be not comparable to other big players like HARTA
23/05/2020 9:23 AM

Posted by freetospeak > 2020-05-23 09:47 | Report Abuse

Thanks Chovio for a great writeup. Got more info from your article. For others, a 2 year bumper profit run is enuff to propel supermax to another level. And move supermax from a 30 million /qtr to a 70 million/qtr business even covid is over. With the next propelling move coming from its contact lens business. i am confident it will keep supermax in the 90 million profit /qtr in 3 yrs time.that is enuff to mantain its price at rm6 at pe 20.even after covid is over.

for how high supermax can run during this covid fever.

to match current topglove marketcap since they might b earning same profit for coming qtr...supermax will hav to reach rm21. or topglove price need to adjust down to supermax price. or they will meet halfway.

Posted by freetospeak > 2020-05-23 09:52 | Report Abuse

the above assumption is unique to supermax only...other glove counter i am not confident.

Posted by Philip ( buy what you understand) > 2020-05-23 10:05 | Report Abuse

If you didn't know Supermax well enough 1 year ago to invest in it, what makes you think you suddenly know supermax well enough today to give such glowing opinions? You are basing multiple years of performance off a singular black swan event.

Wouldn't it be more rational to invest carefully, and to buy it when it was at reasonable valuation rather than heavy speculation?

Posted by lazycat > 2020-05-23 10:09 | Report Abuse

phiip ur recent stock pick kinda no good --> pchem , yinson , gkent

i wanted to ask you what you plan to buy next, but no bother la

Posted by lazycat > 2020-05-23 10:13 | Report Abuse

i kinda wanted to recommend you some stocks , but you sure pijak my stock pick 1 , so i oso no bother do it lol

Posted by freetospeak > 2020-05-23 10:15 | Report Abuse

philip..yes i am limited on my knowledge and is craving for more information as well. Whether it is valuable or not is a developing event. my reasonable valuation keeps changing from 1 yr ago until covid strikes, when it develops into pandemic, the valuation keeps changing.
With more information unfolds, the market is more intelligent in keeping the correct valuation.I am jus investing ahead of market and sharing my insight on this.Since most fund invest based on past information and is slow in action. Forward earning is the way to outpaced them.I do not recommend ppl to follow me, but i am just a learner.

Posted by CharlesT > 2020-05-23 10:21 | Report Abuse

Value investors prefer to look for good stocks which can post 20% growth a year for next 10 years.

They dont like cyclical stock which can go up 200% a year

Posted by Sslee > 2020-05-23 10:27 | Report Abuse

haha CharlesT now also know how to play KoonBee stocks.

Philip recent bought HKG China Feihe also on the down trend as China moves to impose controversial Hong Kong security law.

Posted by CharlesT > 2020-05-23 10:31 | Report Abuse

I knew KB games since many years ago...only recently managed to convince myself to join the game

Posted by CharlesT > 2020-05-23 10:31 | Report Abuse

Money is innocent

Posted by Sslee > 2020-05-23 10:37 | Report Abuse

Haha CharlesT,
If you can’t beat them join them. Welcome to the music chair club but remember don’t be caught without a chair when the music stop.

Posted by probability > 2020-05-23 10:58 | Report Abuse

Philip sifu, kindly enlighten all of us here what special characteristics that a company like Harta has against Supermax to cause such difference in PE.

Exclude the recent effects of Covid 19, i believe it boils down to competitive advantage concept you had introduced in i3

please break it down for us to digest...

TQ

Posted by CCCL > 2020-05-23 13:06 | Report Abuse

The company founder vision.

Posted by qqq33333333 > 2020-05-23 13:16 | Report Abuse

Kenanga latest projection of $ 230 m and $ 400 M for FY6/2020 and FY6/2021, very aggressive already.......................and then of course, the appropriate PE for abnormal profits............lol............

Posted by qqq33333333 > 2020-05-23 13:20 | Report Abuse

for all the last 10 years Harta has always had the best metrics in terms of costs, margin, ROCE, cluster, first in nitrile........and I guess IR..........

Posted by probability > 2020-05-23 13:46 | Report Abuse

Supermax Outlook:
==========

Plant 12 consists of Block A and Block B, each consisting of 8 double former lines with 2.2b pieces each (total 4.4b pieces).

As of now, for Block A, its remaining 3 lines started commissioning in end March 2020 on top of the 5 lines already in commercial production.

For Block B, all 8 lines are expected to be fully commissioned by 2H 2020. Upon full commercial production by 2H 2020, installed capacity will rise 13.4% to 26.2b pieces per annum.

............

Recall, it had completed the acquisition of a piece of land in Meru, Klang on which it plans to build three plants namely Plant 13,14 and 15 which will contribute another 12bn pieces of gloves to its total installed capacity over the next few years.

The 3 plants would add 12.0 billion pieces per annum to the Group‟s installed capacity from 26.18 billion gloves to 38.18 billion gloves when these 3 plants have completed commissioning and in commercial production fully by CY2022.

............

On March 11th , 2020, the Company had also entered into an agreement to purchase another piece of industrial land in Meru, Klang, on which the Company plans to build plant #16. Construction work has already commenced on 2 plants and work on a 3rd plant would commence soon.

............

Total = 42 Billion gloves/annum

Posted by Philip ( buy what you understand) > 2020-05-23 14:02 | Report Abuse

Ok. There is an option in i3 to maintain your portfolio so as to compare your recommendation versus your results, do you use that?

FYI based on my 2019 started portfolio I have been holding 25% of my portfolio in topglove , and sold it recently as well as star media, documented transactions.

I do not do stock picks, I just share the stocks that I do buy.

I would say my performance is ok,

As I also bought:

Pchem at 4.09
Serba at 1.12
Gkent at 0.46
Yinson at 4.56

At huge volumes on margin. You know that the transactions cannot be deleted or edited right? It's all up there you can check individual transactions.

So looking at the results based on these averaged down figures, do you think I did well or not? When everyone is frozen and scared to buy, I bought when blood was on the streets. And I bought just these few stocks instead of 50 stock picks.

So, how did you do during this period? More importantly how did your recommended stocks do during this period?

>>>>>>>>>>


Posted by lazycat > May 23, 2020 10:09 AM | Report Abuse

phiip ur recent stock pick kinda no good --> pchem , yinson , gkent


i kinda wanted to recommend you some stocks , but you sure pijak my stock pick 1 , so i oso no bother do it lol

Posted by Philip ( buy what you understand) > 2020-05-23 14:21 | Report Abuse

In a simple word: patents.

Let me bring up an article from 2010 that caught my attention, and caused the rise of Hartalega huge profit margins.


https://www.theedgemarkets.com/article/hartalega-bullish-after-tillotson-suit-dismissal

https://www.theedgemarkets.com/article/hartalega-bullish-after-tillotson-suit-dismissal

Have you been to Hartalega glove factory before? I went in 2015,
and topglove one in 2009 to understand what makes them different from kossan and supermax and comfort etc.

Basically for medical nitrile gloves they have to meet certain size and quality specifications for US supply.
Hartalega has a patented production processes method that allows them to meet those specifications and yet produce commercially at a cheaper rate than all of its competitors, even topglove, and sell at a higher price.

That is why harta is worth 30 billion.

And a very simple question. What is asp for harta vs asp of other nitrile gloves producers.

That is a competitive advantage that supermax does not have. For it to be valued at 8 billion is an exercise in speculation.

I have held topglove for over 10 years and even I have never seen such speculation. Do you really think supermax is worth that much, or this fervour is sustainable?

>>>>>>>>

Posted by probability > May 23, 2020 10:58 AM | Report Abuse

Philip sifu, kindly enlighten all of us here what special characteristics that a company like Harta has against Supermax to cause such difference in PE.

Exclude the recent effects of Covid 19, i believe it boils down to competitive advantage concept you had introduced in i3

please break it down for us to digest...

TQ

Posted by lazycat > 2020-05-23 14:33 | Report Abuse

this is my 2020 stock pick competition lists

https://klse.i3investor.com/servlets/pfs/131542.jsp

but in real life i only holding 3 stocks , myeg , scomnet , atrium
the reason i split 50/50 , 50% for the 3 stocks , 50% for 5 stocks , 10% each in the competition is because ... i dono .. diversify more , don't concentrate too much , i copy TKW style, 10% for each stocks

but turn out, the stock i hold in real life rebound nicely , i think it will continue going up, what do u think?

Posted by probability > 2020-05-23 14:43 | Report Abuse

Thanks for the discussion Philip. More clarification below:

.................

Q1:

'Hartalega has a patented production processes method that allows them to meet those specifications and yet produce commercially at a cheaper rate than all of its competitors'


This means the product is the same, but the production method is different. Do let us know the magnitude of the reduction in production cost/margin expansion due to this if you are aware. My guesstimate says 95% of the COP can only be the raw material which should be the same for all competitors.


Q2:

'Basically for medical nitrile gloves they have to meet certain size and quality specifications for US supply.'


Guess the above is the reason why ASP of Hartalega higher than its competitors - for having a niche market. This could be the better explanation for the higher profit margin, unlike COP. Do let me know if there are other reasons you are aware.

Posted by Philip ( buy what you understand) > 2020-05-23 14:45 | Report Abuse

I will not comment on what I think, as you seem to think I, will pijak your stocks pick. But the more important question is, did you have confidence in your 3 stocks to buy even more when the big discounts came? Or did you hold, wait and see what was going to happen? Or did you take out margin, sell father mother and go all in your 3 stocks during the super discount fear day.

How you buy is just as important as what you buy.

Look at Jon Choi, looking for alpha overseas, when he could have made huge gains in Malaysia by investing in stocks that he knew well locally.

But fear and worry and thumb-sucking is what really separates profitable investors from article writers.

Not only stock picks, but volume, position size and sell picks.

When you see most gurus don't post their portfolio, hide behind xx stocks and XX stocks, then you know they don't actually do as well buying stocks and give excuses as to why they don't maintain a portfolio. Because a trackable portfolio will reveal how well they manage equity, how much risk they are bearing, how they cut losses, and how they ride winners.

Posted by Sslee > 2020-05-23 15:08 | Report Abuse

Dear Philip,
Result speak for itself so let us compare the past 4 quarter results of Supermax at RM5.75 VS Hartalage at RM 10
Quarter: Revenue: PBT: NP: NP to shareholder: NP margin: ROE: EPS

Supermax:
31-Mar-2020 447,247 95,277 72,349 71,056 16.18% 5.90% 5.42
31-Dec-2019 385,497 41,829 30,022 30,165 7.79% 2.69% 2.31
30-Sep-2019 369,941 32,443 24,960 24,747 6.75% 2.14% 1.89
30-Jun-2019 375,964 16,198 14,004 15,059 3.72% 1.38% 1.15

Hartalage:
31-Mar-2020 777,898 137,575 115,711 115,579 14.87% 4.58% 3.43
31-Dec-2019 796,550 159,697 121,661 121,273 15.27% 4.94% 3.60
30-Sep-2019 709,424 137,327 104,206 103,867 14.69% 4.42% 3.09
30-Jun-2019 640,101 121,654 94,254 94,063 14.72% 4.07% 2.81

So any particular reason why Supermax quarter end 31-March 2020 NP margin jump from 7.79% to 16.18% and EPS 5.42 overtook Hartalage 3.43.

Topgrove
29-Feb-2020 1,229,777 130,374 116,012 115,683 9.43% 2.92% 4.52
30-Nov-2019 1,209,100 125,452 111,757 111,426 9.24% 4.32% 4.36
31-Aug-2019 1,189,594 81,160 80,076 80,052 6.73% 3.29% 3.13
31-May-2019 1,190,235 82,239 75,188 74,665 6.32% 3.01% 2.92

Posted by probability > 2020-05-23 15:13 | Report Abuse

Perhaps the recent covid outbreak, forced U.S to use Supermax gloves though it had not met the special specification needed earlier..

Who knows, this may catalyze a new breakthrough market for Supermax permanently...

Perhaps we can look it at it another way, Harta has the risk of losing the margin in the future if Supermax is able to penetrate the same niche market

Posted by qqq33333333 > 2020-05-23 15:28 | Report Abuse

why the sudden jump in profits in supermax not harta?

I guess it has to do with consignment stocks...

OBM stocks overseas stocks are considered sold in period....

whereas Harta sales are to agents.......

different timing

Posted by lazycat > 2020-05-23 15:49 | Report Abuse

ya man , i have high confidence at the 3 stocks i hold, i did buy more during price plunging hahahaha..

Posted by Lanesra > 2020-05-23 17:08 | Report Abuse

Good article, for young ones in the forum.

Posted by EngineeringProfit > 2020-05-23 17:13 | Report Abuse

Enough of poster, research data and advertisement for season one.....

......(pause first and start writing for articles to be posted when its price in tge range of RM10-15, i.e. Calvin's calf turns a little cow - giving milk, bonuses, biggest dividend ever, eyc)

Posted by PureBULL ... > 2020-05-23 17:35 | Report Abuse

son Choivo ,
u do have high passion in equity investment.

u do know a lot a lot.
most importantly learn from the v BEST, the 1st ancient guru from wall street u must to excel every yr.
there r 2 cycles on klse.
every cycle u n we must catch the Ms u stocks early !?!

Posted by myongcc5 > 2020-05-23 17:47 | Report Abuse

U r young talented n honest!
Experiences will gets U far one day.
Honestly, I bot 100% into comfort n made double returns. However, ti's did not happen in my young days.
Do not b dismay, there r plenty opportunities ahead of u.

Posted by willie88 > 2020-05-23 23:03 | Report Abuse

https://klse.i3investor.com/servlets/ptres/55259.jsp


based on this cimb recommendation still hv room to profit, wld u even consider to trade supermax. Another opportunity now ???

Posted by newbie911 > 2020-05-24 10:28 | Report Abuse

Analyse a lot...but cant earn.
Can see cannot eat.

Posted by freetospeak > 2020-05-24 10:46 | Report Abuse

seems many here still surprised by the high margin for supermax. My calculation shows supermax margin for next qtr is 31%. Hope will raise anyone attention.

My projection for qtr 3 with profit from 75 mil to 100 mil. my projection was off a bit becoz supermax sold old stock at cheaper pricing n bumper profit appears only in march onwards. Supermax starts backward billing now which commands highest price getting stock first will boost margin many fold.New lines online since march will further boost sales as well.

Posted by probability > 2020-05-24 14:10 | Report Abuse

when we hear the word vaccine - we need to understand two things:

(1) How good is the vaccine - 100% effective?

Can the vaccine has 100% effectiveness? Even if 1% is not effective, Considering this - would FDA allow it to be used worldwide?
Dont forget its mutating rapidly. Vaccine for current virus may not be effective for the mutated version.

(2) Does the vaccine has - 0% side effects?

Almost all vaccines has side effects and you cannot know what is the side effects till you use it and see the effects after a year.

Say the side effects is minor. Would u still get yourself immunised? After all, the cases are not that high and the risk for young and healthy is almost nil.

..............

Considering the above, would the world quickly implement a newly discovered vaccine without thorough long terms side effects studies and enforce it?

the risk vs gains would not justify such enforcement easily unless they are absolutely 100% sure it is effective and has ZERO side effects.

In my opinion, the above is the reality and you would not hear vaccination enforced for the next 2 years at the least.

Governments would rather encourage self protection measures till then.

Posted by samheong78 > 2020-05-25 09:09 | Report Abuse

For supermax to invest RM50 million in share buy back tell us something we don't know.

Posted by Alex™ > 2020-05-25 09:16 | Report Abuse

alex watch comfort from 60sen to rm3...

why no buyyyyyyy

Posted by Alex™ > 2020-05-25 09:17 | Report Abuse

if sailang all in x3 sell car sell house comfort....wah....can retire d

Posted by David > 2020-05-25 14:01 | Report Abuse

Seriously, PE 10 ???

By going 95% now, they probably have to cut ties with some existing customers. Question is what they will do post Covid19 or several years from now (when their additional capacity comes in).. The competitors will not be HARTA, TOPGLOVE, KOSSAN but the big international names. If SUPERMAX can compete then it's re-rating and game changer.

Posted by Joon Chan > 2020-05-29 06:57 | Report Abuse

You/Me/We have huge case of cognitive dissonance.

But there are few rational answers, just that some are more rational than the other, depending on tolerance,position size & ideology.

The past few days, 240m ringgit greedy money heading to the moon.

On one had, you argue with Ms.Market, though you are right, it's only in the future you're exonerated.

I'm taking Ms.Market to dinner, making her pay for my meal, then ghosting via stop-loss.

Which is more accurate?
QL will increase in value 98% probability in 3 years.
Supermax will increase in value, 98% probability in 18 hours.