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Gloves and more

On this score, STGT is also better SAFE HAVEN PLAY than  Supermax Besides STA

tonyja      ( Date: 06-May-2021 15:45) Posted: Tradeview Commentaries - Supermax DOES NOT Represent Hartalega, Riverstone or Kossan   Seeing the title, you may be wondering, Supermax is part of the Big 4, how can it not be a representation of the glove sector and other peers. Do have a little patience and read on.  I believe Malaysia investors are the most savvy when it comes to the glove sector. Many know quite a lot about gloves, ASP, buying / selling trends, pros & cons. So all these need not require further explanation. The only 2 common issues I come across that most investors differ upon is their preference of the glove companies and the valuation.    Ex: I noticed quite a clear distinction. Those who like to invest in Top Glove and Supermax generally do not invest in Hartalega and Kossan. Vice versa. The question is why? Well the most common reason I hear retail investors highlighting is that " ASP of Supermax is highest followed by Top Glove" , " Supermax and Top Glove share price always surge like rocket unlike Hartalega and Kossan" etc. A few prominent investors even use PER to justify, Supermax is the cheapest glove company amongst all. It is for this reason, retail investors seem to like Supermax and Top Glove more than the others.    Now, this is where I would share a different perspective. I have always highlighted my favourite glove companies would be Hartalega and Riverstone. Sri Trang Agro and Kossan is close by. The main reason I like Hartalega and Riverstone is because of the high level of efficiency, productivity, ESG compliant and innovation / market leader in their respective area. I even called Hartalega, the " True King of Nitrile Glove" . Why? Because being a champion in the particular product or sector the metric to measure is not solely capacity. Biggest volume dont make you the king. Your quality, innovation and pioneering initiatives is what sets apart the Tier 1 from the others. If we sum up everything, it comes down to the management. When you invest in Berkshire Hathaway, I believe 90% of the investors invest because they believe in Warren Buffet & Charlie Munger, not because of the companies that Berkshire Hathaway owns. When local retail investors invest in Public Bank, they believe in Tan Sri Teh Hiong Piow. When you invest in Hartalega, you believe in the management of Mr Kuan & family to do the right thing.    We know Supermax pride itself of being an OBM player. During the height of pandemic, they were first to hike ASP to sky high levels. At one point as high as USD 150-160 per carton (not blended ASP). Supermax reduced OEM, cut out middleman and distributors but go direct to end consumers or clients. Many praised Supermax and hence invested in them. Research houses said " OBM model paid off handsomely" . Shower of praises keep pouring in. What happened overnight? Why the negativity all around?    Well, OBM is a double edge sword. Life is also a cycle. What goes around comes around. In times of need, hiking ASP astronomically and cutting out distributors allow the company to maximise profits. Similarly, when times are less dire, customers need not take at such exorbitant prices. However, as Supermax focused on spot rates, losing OEM clients with long term contracts, the impact starts to kick in and faster than their peers.    Hartalega, Kossan & Riverstone had the foresight to be gentleman and considerate in taking care of their clients. They were slow to hike rates, they ensure all existing clients can secure allocations. Even spot rates did not take up large portion of their total capacity. They allowed distributors, middleman, OEM clients to make fat margins (sharing profits with them). If you are the client, who would you go to now if you want to buy your products? This is why Hartalega ASP is rising and in Supermax own statement " Spot rate prices have fallen below contract prices" . Supermax is not a representation of Hartalega, Kossan or Riverstone. It never was and never will be. The business model and management philosophy is different. Retail investors must distinguish fact from fiction.

 

Tradeview Commentaries - Supermax DOES NOT Represent Hartalega, Riverstone or Kossan

 

Seeing the title, you may be wondering, Supermax is part of the Big 4, how can it not be a representation of the glove sector and other peers. Do have a little patience and read on. 

I believe Malaysia investors are the most savvy when it comes to the glove sector. Many know quite a lot about gloves, ASP, buying / selling trends, pros & cons. So all these need not require further explanation. The only 2 common issues I come across that most investors differ upon is their preference of the glove companies and the valuation. 

 

Ex: I noticed quite a clear distinction. Those who like to invest in Top Glove and Supermax generally do not invest in Hartalega and Kossan. Vice versa. The question is why? Well the most common reason I hear retail investors highlighting is that " ASP of Supermax is highest followed by Top Glove" , " Supermax and Top Glove share price always surge like rocket unlike Hartalega and Kossan" etc. A few prominent investors even use PER to justify, Supermax is the cheapest glove company amongst all. It is for this reason, retail investors seem to like Supermax and Top Glove more than the others. 

 

Now, this is where I would share a different perspective. I have always highlighted my favourite glove companies would be Hartalega and Riverstone. Sri Trang Agro and Kossan is close by. The main reason I like Hartalega and Riverstone is because of the high level of efficiency, productivity, ESG compliant and innovation / market leader in their respective area. I even called Hartalega, the " True King of Nitrile Glove" . Why? Because being a champion in the particular product or sector the metric to measure is not solely capacity. Biggest volume dont make you the king. Your quality, innovation and pioneering initiatives is what sets apart the Tier 1 from the others. If we sum up everything, it comes down to the management. When you invest in Berkshire Hathaway, I believe 90% of the investors invest because they believe in Warren Buffet & Charlie Munger, not because of the companies that Berkshire Hathaway owns. When local retail investors invest in Public Bank, they believe in Tan Sri Teh Hiong Piow. When you invest in Hartalega, you believe in the management of Mr Kuan & family to do the right thing. 

 

We know Supermax pride itself of being an OBM player. During the height of pandemic, they were first to hike ASP to sky high levels. At one point as high as USD 150-160 per carton (not blended ASP). Supermax reduced OEM, cut out middleman and distributors but go direct to end consumers or clients. Many praised Supermax and hence invested in them. Research houses said " OBM model paid off handsomely" . Shower of praises keep pouring in. What happened overnight? Why the negativity all around? 

 

Well, OBM is a double edge sword. Life is also a cycle. What goes around comes around. In times of need, hiking ASP astronomically and cutting out distributors allow the company to maximise profits. Similarly, when times are less dire, customers need not take at such exorbitant prices. However, as Supermax focused on spot rates, losing OEM clients with long term contracts, the impact starts to kick in and faster than their peers. 

 

Hartalega, Kossan & Riverstone had the foresight to be gentleman and considerate in taking care of their clients. They were slow to hike rates, they ensure all existing clients can secure allocations. Even spot rates did not take up large portion of their total capacity. They allowed distributors, middleman, OEM clients to make fat margins (sharing profits with them). If you are the client, who would you go to now if you want to buy your products? This is why Hartalega ASP is rising and in Supermax own statement " Spot rate prices have fallen below contract prices" . Supermax is not a representation of Hartalega, Kossan or Riverstone. It never was and never will be. The business model and management philosophy is different. Retail investors must distinguish fact from fiction.

 

Thanks Longtermer. I will hold on to my higher priced stocks since already fully paid.

 

Guys, today UG suffered huge drop for no apparent reason except maybe being pulled down by the Bursa peers.
Fyi, the Malaysian gloves companies are trading at much higher PE and have ran up more in percentage.
Be steady when ppl are selling as the coming results on Mon will provide more visibility on the company.
This is one of the most lowest priced glove counter in terms of PE ratio.
UG sell directly to comsumers and produce all types of gloves in many industries. Their main mkt in Brazil and Europe are still struggling with the Covid cases and demands will likely be elevated in these regions.

Dyodd and dun sell cheap.
Dun be greedy and so dun contra.
Hold to see good news i believe will come this Mon.. Cheers.
 

Longtermer      ( Date: 27-Apr-2021 12:55) Posted: Constructive assessment for holding longer. UG will report Q3 results on 10th May. Just a recap on past performance... UG 2020 results H1    Rev 53.2m     Net Profit  0.85m    EPS  0.4c H2   Rev 91m     Net Profit  12.5m    EPS  6.4c UG 2021 results so far: H1   Rev 159.4m     Net Profit  54.9m    EPS  9.0c (for half yr) Breaking it by qtrs: Q1    Rev 71.2m     Net Profit  22.7m     EPS  3.7c Q2    Rev 88.2m        Net Profit  32.3m      EPS  5.3c Q3  ??? announcing on 10 May How will UG perform this coming qtr? What will be the revenues and net profits and most importantly its EPS for Q3. What will be the EPS est for whole year 2021? Will it exceed ppl expectation? With the coming balance sheet and profits guide, what dividend is likely to be given in 2021? All the above Akan datang.. coming soon.. 10 May opening! Dyodd.. Huat.

 

Yes a glove stock is still a glove stock, but even discounting the 20% average price drop the profits made by these companies is very good still. Only problem is the sentiment of the investors are shaken currently.

 

Relative to Msian Gloves Counters, STA is   considered a SAFE HAVEN HYBRID STOCK as STA is both RUBBER/GLOes PLAY all in one.
However DUE DILIGENCE IS SERIOUSLY WARRANTED 

tonyja      ( Date: 06-May-2021 09:21) Posted: Supermax: Rubber glove spot prices on downtrend, fall 15% to 25% /  May 05, 2021 19:20 pm +08 Supermax: Rubber glove spot prices on downtrend, fall 15% to 25% KUALA LUMPUR (May 5): As more new capacities are available in the market, rubber glove prices have started falling, said Supermax Corp Bhd. " The glove prices have since dropped by between 15% and 25%. Currently, the spot market prices are lower than the contracted prices," said the rubber glove maker in its quarterly results' announcement. The group, which posted a net profit of RM1 billion for the third quarter ended March 31, 2021 (3QFY21), said it anticipates the competition to intensify going forward. There have been more new glove players jumping on the bandwagon in view of the surge in demand. In addition, the current players are increasing capacities in a large scale, especially players who are public-listed companies based in China, Malaysia and Thailand, Supermax commented. " We are confident that our sound business model and well-established distribution networks built up since 1989 have prepared us well for all challenges ahead," it said. On prospects, the group said the demand for gloves as personal protective equipment remains strong as the world continues to fight the Covid-19 pandemic. While it is widely expected that the roll-out of Covid-19 vaccines will cause glove demand and consumption to moderate, the company believes that the drop will likely be gradual due to the structural changes in consumption, such as new consumption, new customers and greatly heightened healthcare and hygiene awareness. Supermax announced a quarterly net profit of RM1 billion for 3QFY21, 5.2% lower compared with RM1.06 billion recorded in 2QFY21. Its quarter revenue fell 3% to RM1.94 billion in 3QFY21 compared with RM2 billion in 2QFY21. Supermax commented its earnings would have been even better if not for the temporary shutdown of its Meru plants for sanitisation following detection of positive Covid-19 cases among the foreign workers. According to Supermax, the group currently exports 58% of production under its own brands via its own distribution centres and 40% through independent distributors the remaining 2% is for original equipment manufacturer (OEM) production. " Due to the current robust demand, we are taking the opportunity to build new relationships with new customers and distributors in anticipation that they will continue with repeat orders post pandemic," it said.

 

Same biz model BUT different market.
UG main mkt in Brazil and Europe which are very affected by Covid resurgence.
Check out their cases which are in recent high exceeding last high in Jan.
Results next Mon will get more input..

 

leleguo      ( Date: 06-May-2021 13:59) Posted: UG has the same business model as Supermax. DYODD.

 

UG has the same business model as Supermax. DYODD.

 

What happened that the price dropped so much today?

 

oops some bad news on glove prices coming off. read in top glove forum. Hope price stabilizes 

 

Bought some today.. good pick from those weak holders.
No contra.. Cheers
 

coolbear123      ( Date: 06-May-2021 09:26) Posted: Bought some, looks like a good pullback. Missed the recent rally.

 

Moderna booster increases antibodies against COVID-19 variants, early data shows

World

NEW YORK: Moderna said on Wednesday (May 5) early human trial data shows that a third dose of either its current COVID-19 shot or an experimental new vaccine candidate increases immunity against variants of COVID-19 first found in Brazil and South Africa.

The booster shots, given to volunteers previously inoculated with Moderna' s two-dose vaccine regimen, also boosted antibodies against the original version of COVID-19, Moderna said.

The early data comes from a 40-person trial testing both Moderna' s existing shot and a version developed to protect against the South African variant of COVID-19 called mRNA-1273.351. Moderna is also studying a shot that combines both the new and existing vaccine.

READ:  WHO lists Moderna' s COVID-19 vaccine for emergency use

READ:  US preparing for 1-year COVID-19 booster shots Pfizer chief sees need

The results show that while booster shots of either version of the vaccine increased antibodies against all of the variants of COVID-19 tested in the trial, the new booster had a bigger response against the South African variant than the original vaccine.

" We are encouraged by these new data, which reinforce our confidence that our booster strategy should be protective" against the newer variants of COVID-19, Stephane Bancel, Moderna' s chief executive officer, said in a statement.

Both booster shots were well tolerated, with side effects similar to what volunteers in previous studies experienced from the second dose of its vaccine, Moderna said.

The new variants of COVID-19 first discovered in South Africa and Brazil are thought to be more resistant to existing vaccines. Both variants have been detected in the United States but comprise only a small fraction of US  cases so far, according to federal data last updated in April.

Moderna' s study is looking at levels of antibodies in participants' blood that combat COVID-19, an early indication that they will be protected against the virus. It first announced it was studying ways to protect against the variants of COVID-19 in February.

Moderna expects to share additional data soon on another potential booster shot that mixes its existing COVID-19 vaccine with the newly developed shot.

The US  government scientists at the National Institute of Allergy and Infectious Diseases (NIAID) is conducting a separate early stage study of mRNA-1273.351, Moderna said. 

 

Spot price is different from contract prices.
Those sales booked till 2022 will maintain high prices.
Future prices will be much higher than pre covid due to more demands and stock piling needs..
Why Supermax is still expanding?
UG will report results next Mon. Hope to see interim dividend as a pleasant surprise..
Dyodd.
 

tonyja      ( Date: 06-May-2021 09:21) Posted: Supermax: Rubber glove spot prices on downtrend, fall 15% to 25% /  May 05, 2021 19:20 pm +08 Supermax: Rubber glove spot prices on downtrend, fall 15% to 25% KUALA LUMPUR (May 5): As more new capacities are available in the market, rubber glove prices have started falling, said Supermax Corp Bhd. " The glove prices have since dropped by between 15% and 25%. Currently, the spot market prices are lower than the contracted prices," said the rubber glove maker in its quarterly results' announcement. The group, which posted a net profit of RM1 billion for the third quarter ended March 31, 2021 (3QFY21), said it anticipates the competition to intensify going forward. There have been more new glove players jumping on the bandwagon in view of the surge in demand. In addition, the current players are increasing capacities in a large scale, especially players who are public-listed companies based in China, Malaysia and Thailand, Supermax commented. " We are confident that our sound business model and well-established distribution networks built up since 1989 have prepared us well for all challenges ahead," it said. On prospects, the group said the demand for gloves as personal protective equipment remains strong as the world continues to fight the Covid-19 pandemic. While it is widely expected that the roll-out of Covid-19 vaccines will cause glove demand and consumption to moderate, the company believes that the drop will likely be gradual due to the structural changes in consumption, such as new consumption, new customers and greatly heightened healthcare and hygiene awareness. Supermax announced a quarterly net profit of RM1 billion for 3QFY21, 5.2% lower compared with RM1.06 billion recorded in 2QFY21. Its quarter revenue fell 3% to RM1.94 billion in 3QFY21 compared with RM2 billion in 2QFY21. Supermax commented its earnings would have been even better if not for the temporary shutdown of its Meru plants for sanitisation following detection of positive Covid-19 cases among the foreign workers. According to Supermax, the group currently exports 58% of production under its own brands via its own distribution centres and 40% through independent distributors the remaining 2% is for original equipment manufacturer (OEM) production. " Due to the current robust demand, we are taking the opportunity to build new relationships with new customers and distributors in anticipation that they will continue with repeat orders post pandemic," it said.

 

Bought some, looks like a good pullback. Missed the recent rally.

 

Covid on rampage still fall

 

Supermax: Rubber glove spot prices on downtrend, fall 15% to 25%

/ 
May 05, 2021 19:20 pm +08
Supermax: Rubber glove spot prices on downtrend, fall 15% to 25%
KUALA LUMPUR (May 5): As more new capacities are available in the market, rubber glove prices have started falling, said Supermax Corp Bhd.

" The glove prices have since dropped by between 15% and 25%. Currently, the spot market prices are lower than the contracted prices," said the rubber glove maker in its quarterly results' announcement.

The group, which posted a net profit of RM1 billion for the third quarter ended March 31, 2021 (3QFY21), said it anticipates the competition to intensify going forward.

There have been more new glove players jumping on the bandwagon in view of the surge in demand. In addition, the current players are increasing capacities in a large scale, especially players who are public-listed companies based in China, Malaysia and Thailand, Supermax commented.

" We are confident that our sound business model and well-established distribution networks built up since 1989 have prepared us well for all challenges ahead," it said.

On prospects, the group said the demand for gloves as personal protective equipment remains strong as the world continues to fight the Covid-19 pandemic.

While it is widely expected that the roll-out of Covid-19 vaccines will cause glove demand and consumption to moderate, the company believes that the drop will likely be gradual due to the structural changes in consumption, such as new consumption, new customers and greatly heightened healthcare and hygiene awareness.

Supermax announced a quarterly net profit of RM1 billion for 3QFY21, 5.2% lower compared with RM1.06 billion recorded in 2QFY21. Its quarter revenue fell 3% to RM1.94 billion in 3QFY21 compared with RM2 billion in 2QFY21.

Supermax commented its earnings would have been even better if not for the temporary shutdown of its Meru plants for sanitisation following detection of positive Covid-19 cases among the foreign workers.

According to Supermax, the group currently exports 58% of production under its own brands via its own distribution centres and 40% through independent distributors the remaining 2% is for original equipment manufacturer (OEM) production.

" Due to the current robust demand, we are taking the opportunity to build new relationships with new customers and distributors in anticipation that they will continue with repeat orders post pandemic," it said.

 

Refer to the same report, the Minister mentioned they are not hoing ahead with this suggestion. Check it out.

Inferno      ( Date: 05-May-2021 09:29) Posted: Haha... never give up a chance to makan money... windfall tax. Got to give it to them for their creativity though.

 

US Customs seizes Malaysia' s Top Glove shipment following forced labour finding

World

KUALA LUMPUR: The US  Customs and Border Protection (CBP) has seized a shipment of 3.97 million nitrile disposable gloves from Malaysia' s Top Glove estimated to be worth US$518,000, on indications they were made by forced labour, it said on  Wednesday (May 5).

CBP on Mar 29 issued a forced labour finding based on evidence of multiple forced labour indicators in the world' s largest medical glove maker' s production process.

It had initially banned products from two of Top Glove' s subsidiaries last July, but extended the ban to all of the manufacturer' s products made in Malaysia in March.

The indicators included debt bondage, excessive overtime, abusive working and living conditions, and retention of identity documents, the CBP said in a statement.

READ:  US Customs determines forced labour at Malaysia' s Top Glove, to seize gloves

The agency then directed personnel at all US  ports of entry to begin seizing disposable gloves produced in Malaysia by the glove maker.

" CBP continues to facilitate the importation of legitimate PPE needed for the COVID-19 pandemic while ensuring that the PPE is authorized and safe for use," Diann Rodriguez, Area Port Director-Cleveland, referring to personal protective equipment.

Top Glove said last month its glove production has been affected because of the US  ban, and announced last week it had resolved all indicators of forced labour in its operations, citing a report by the ethical trade consultancy it hired. 

 

Bad day for shares. I decided to do nothing today just watch the market drift !

 

Haha... never give up a chance to makan money... windfall tax. Got to give it to them for their creativity though.