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Building Glove Manufacturing Plants Closer to Customers in the USA& in UK
Allocation of US$300 million in Glove Manufacturing in USA for Phase #1 & US$250
million for Phase #2.
As for the UK, the company is studying the Industrial Land that Supermax UK acquired earlier
is suitable for use in Glove Manufacturing
Plant #18 in USA would kick-start in 1H2021 and target to commission in stages starting
1H2022.
As for Plant #19, we are still studying the suitability of the manufacturing site and it
would require more time to identify the site since the UK has imposed restriction of movement
control for visitors.
We have shortlisted several suitable manufacturing site for plant #18 in the US and is currently
working with State and local county for various infrastructural support etc.
CGS-CIMB Research expects stronger quarters ahead for Supermax, raises TP to RM11.80
KUALA LUMPUR (Feb 1): CGS-CIMB Research has retained its ‘add’ call on Supermax Corp Bhd at RM6.80 with a higher target price of RM11.80 (from RM10.80) to reflect the earnings per share (EPS) upgrade, pegged at 15 times calendar year 2022 forecast (CY22F) price-earnings (P/E), in line with the glove sector’s five-year mean P/E.
In a note last Friday, analyst Walter Aw continued to view Supermax as an attractive play, backed by strong global glove demand owing to Covid-19, higher-than-average margins in the sector (due to its original brand manufacturing model) and solid dividend yields of 4%-9% forecast for the financial year ending June 30, 2021 (FY21F)-FY23F.
To recap, the glove maker’s net profit for the second quarter ended Dec 31, 2020 (2QFY21) climbed 34% quarter-on-quarter (q-o-q) to RM1.06 billion from RM789.52 million in preceding 1QFY21, while quarterly revenue surged to RM2 billion compared with RM1.35 billion in the preceding quarter.
On a yearly basis, net profit jumped by a whopping 3,142% from RM30.17 million a year ago, while revenue also surged from RM385.5 million last year.
Aw said CGS-CIMB deemed the results to be above expectations at 57.2% of the house's and 55.6% of the Bloomberg consensus full-year forecasts.
“This is premised on our view of stronger 2HFY21 results (for the second half ending June 30, 2021), driven by further rise in average selling prices (ASPs) and higher sales volume. It also declared a first interim dividend of 3.8 sen/share within expectations,” he said.
With the 1HFY21 results beating expectations, Aw raised the group’s EPS for FY21F-FY23F by 0.5%-37.8%, mainly to input higher ASPs (US$81 [RM327.44]/US$57/US$36 per one thousand pieces for FY21F/22F/23F).
He noted that Supermax is expected to record stronger results in 2HFY21, driven by an increase in production capacity and higher sales volume, adding that the group continues to witness strong global demand for gloves.
Last Friday, Supermax closed 3.66% or 24 sen higher at RM6.80. This brought its market capitalisation to RM17.8 billion.
KUALA LUMPUR (Feb 8): Bursa Malaysia has announced half-day trading for Thursday, the eve of Chinese New Year, and all-day closure for Friday.
The stock exchange said trading on Feb 11 will be opened for the morning session only and there will be no trading in the afternoon session.
"However, clearing and settlement services provided by Bursa Malaysia Securities Clearing; depository services provided by Bursa Malaysia Depository; and clearing and settlement operations of Bursa Malaysia Derivatives Bhd will continue as usual until the end of the business day," it said in a statement today.
Bursa Malaysia and all its subsidiaries will resume operations on Feb 15.
