supermx 将在4月公布 2010 Q1 财报，目标价 10 块 ！！！

百万千万梦想

Still has back orders to clear. For Supermax, its capacity expansion is on track. It

will start testing the first few lines at its Meru plant this month. The company

mentioned that it had to turn down many orders as demand is still strong and it does

not have sufficient capacity. It still has to clear back orders from last year totalling

5.4bn pieces. The company mentioned that due to the current high prices, some of the

customers which placed the orders that are backlogged now prefer to defer their

shipment to the later part of this year where prices are expected to stabilise.

Supermax estimates that the earliest possible timeline for it to clear the order backlog

is towards the end of 3Q this year.

Positive stance remains. We remain positive on the rubber glove sector. As

highlighted in the sector update we issued on 24 March 2010, investors are concerned

about a repeat of the share price collapse in 2008 when investors assumed that

record latex prices, high energy prices and a weakening US$ would dampen

glovemakers’ earnings significantly. We think that the recent selldown of the stocks is

unjustified given the resilient demand for rubber gloves and glove manufacturers’

ability to pass on cost increases. Moreover, glove manufacturers proved their

resilience against the 2008-9 global economic turmoil and earnings continued to rise

despite the weakening US$ and high costs during 2008. We have checked with

industry players and they concur with our view. As Figures 6-8 show, Supermax’s

earnings and margins remained intact or even improved over the past few years

despite rising latex costs and a volatile RM:US$. On average, the total net profit of the

companies in our coverage increased 19.5% in FY08 and 65.3% in FY09. Given that

no capacity was added in the past two years and new capacity is expected to

contribute in 2H this year, we expect Supermax’s core net profit to grow by at least

25% this year.

Earnings outlook

Higher earnings yoy and qoq. Supermax is scheduled to release its 1Q10 results

during lunchtime on 19 April. Although no new capacity was added during the quarter,

we gathered that backlog shipments of RM25m from 4Q09 were recognised in 1Q this

year. In 4Q, the company had also incurred a one-off interest expense of RM5.4m

arising from its early redemption of bonds due to mature in 2012. Taking all this into

account along with the potential adjustment of selling prices due to higher latex prices

and a weakening US$, we estimate that the company could report a net profit of

around RM50m in 1Q, which is more than double 1Q09 earnings and about 13%

higher than 4Q09.

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百万千万梦想

Earnings outlook

Higher earnings yoy and qoq. Supermax is scheduled to release its 1Q10 results

during lunchtime on 19 April. Although no new capacity was added during the quarter,

we gathered that backlog shipments of RM25m from 4Q09 were recognised in 1Q this

year. In 4Q, the company had also incurred a one-off interest expense of RM5.4m

arising from its early redemption of bonds due to mature in 2012. Taking all this into

account along with the potential adjustment of selling prices due to higher latex prices

and a weakening US$, we estimate that the company could report a net profit of

around RM50m in 1Q, which is more than double 1Q09 earnings and about 13%

higher than 4Q09.


Earnings under review. Recently, the company announced that it was looking at

achieving RM168m net profit which is just 1% short of our current forecast of

RM170m. Given the potential strong numbers to be announced by the company next

week, we are keeping our earnings under review. We expect stronger contributions in

the remaining quarters and flag the likelihood of 23-25% upgrades in our FY10-12

earnings forecasts when the results are announced. We are conservatively looking at

quarterly earnings in the range of RM50m-RM55m for the next three quarters.


Recommendation

Still in (g)love. Supermax is trading at a forward P/E of only 9.6x, a 22% discount to

its historical peak of 12.3x. As the share price scaled a new all-time high recently, we

anticipated a selldown of this stock along with other rubber glove stocks. While we

view the selldown as healthy, we do not think the concerns which drove the fall were

justified given the resilient demand for rubber gloves and glove manufacturers’ ability

to pass on cost increases, be it latex, energy or even a weaker US$. We believe that

Supermax deserves to trade above its historical peak given its size (second largest in

terms of capacity), liquidity (the most liquid rubber glove stock), earnings consistency

(strong earnings since APLI write-off) and strong prospects for its OBM gloves and

overseas distribution centres.


More upside to rubber glove stocks. Supermax will be the first among its peers to

release its 1Q10 results. We expect a strong performance by the company on both

qoq and yoy basis. We also think that there could some surprises from the rest of the

companies which are due to release their results next month. There could be revisions

to our earnings forecasts for these companies too.



Maintain BUY. We strongly believe that industry prospects remain favourable and

Supermax is one of the key beneficiaries. We maintain our BUY call on Supermax.

The current share price weakness is a great buying opportunity as the strong results

next week will assuage investors’ fears. Our earnings forecasts and target price are

under review and FY10-12 earnings may be raised by 23-25%. For now, our target

price remains intact at RM9.65, still pegged to a 20% discount to Top Glove’s target

P/E of 16.5x. The stock will go ex of its proposed 1-to-4 bonus issue by the end of

June. This will enhance the stock’s liquidity and make it more affordable in terms of

absolute cost. Potential re-rating catalysts include the anticipated strong 1Q results,

continuing uptick in glove demand and upcoming capacity expansion. Supermax

remains one of our top picks for the glove sector.

pang72

Supermax。。在爬楼梯。。。。。。

超笨无比

Supermx宣布8%免税股息,恭喜.........
也有消息Kossan将会公布1对1红股

zeonzheng

是好事还是坏事？
股价今天面对卖压的？？

bzxperson

今天跌至RM6.68了，各位大大建议继续进货？？

寻宝之旅

Super 跌到RM6.10而已!! 如果没有Topglove 和Kossan 1:1 酱美的offer, 今天我肯定会在买进它。相信手套股还有的来的。