The initial announcement has mentioned the proposed bonus issue will be completed within 90 days of announcement date i.e. 14 Nov 13. I'm a long-term investor. I share the same view on Karex's latest TP of RM4.54 by CIMB. In fact, I'm slightly more bullish at RM4.90.
(Dec 13, RM3.82) Maintain add at RM3.77 with a target price of RM4.54: We visited Karex’s production facilities in Port Klang recently. We felt the optimism of the management and are convinced that utilisation for its new lines will hit at least 75% due to the high number of pending orders and low world condom consumption per capita. We maintain our earnings per share (EPS) and continue to value Karex at 17 times calendar year 2015 price-earnings ratio (PER) (a 20% premium over the rubber glove sector’s 13.8 times average forward PER). Karex is the world’s largest condom manufacturer and we believe further market share gains will catalyse its share price. We visited Karex’s manufacturing plant with eight other fund managers and analysts. We were hosted by chief executive officer Goh Miah Kiat who explained the entire manufacturing process, including product quality testing. The plant visit was followed by a presentation and question and answer session. Most of the questions centred on demand for condoms and room for margin expansion. There were no surprises during our visit but we felt the optimism of management. We are convinced that demand will continue to grow, given low world consumption of only 3.3 condoms per capita per year. Karex should be able to fill up its new capacity with the large pending orders. We were also delighted to learn that it has very strict quality testing procedures at each stage of the production process. This is to ensure that the company retains its licences and orders keep streaming in. Its highly automated processes and in-house machine designing should ensure high operating efficiency, keeping Karex competitive. Poorer consumer spending in Malaysia should not affect demand for condoms since they are considered a necessity.
Im sure today noon gonna fly high:-) morn people were taking profit, with the bonus issue to be announced soon plus cimb up the target price and posted again today on edge..im sure its gonna fly:-)
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
sd99
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Posted by sd99 > 2013-12-12 16:35 | Report Abuse
klci is down and karex has performed quite well so far..