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freetospeak

Author: freetospeak   |   Latest post: Fri, 4 Sep 2020, 10:31 AM

 

SUPERMAX - Russia’s Vaccine Gamble vs Supermax Q1 Results

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CiA.CONSORTIUM of INDEPENDANT ANALYST

@free@prob@wok@chief@dynasty@yfhew1 


Congratulation to all Supermax Shareholders !!! Salute to all Supermax Staff and Management !!!


 

Russia’s Vaccine Gamble vs Supermax Q1 Results

It is no surprise why the vaccine announced by President Putin bears the name of Sputnik V. This brings us back to the era at the dawn of the cold war between the Soviet Union and America or NATO.

It was the beginning of The Space Race!

Yes, Russia made it first by sending an object to space which was called Sputnik. It did nothing more than just to broadcast a single signal back to earth to show that they were ahead.

News for vaccine is bringing a lot of attention in the media lately but in reality its efficacy is yet to be known…..not at least in this short period of time. Sputnik V is just like Sputnik……doing nothing more than just global political theatrics.

Because of our general desire in anticipating for a quick solution to this pandemic, just like in the days of the cold war, super powers manipulates these information for political/strategic purposes…….and markets falls prey to it.

Coming back to the era of the cold war, you all may know how this story ended…..America managed to put a man on the moon and the Soviet Union collapsed.

CiA have tried to be bring you independent analysis. Our earlier estimate of Supermax’s Q4 results had an accuracy as follow;

Revenue Forecast vs Actual = 88% accuracy

PAT Percentage Forecast vs Actual = 95% accuracy

*PAT Forecast vs Actual = 85%   *If taking into consideration the PAT 120mil brought forward to Q1, then it’s the PAT Forecast Accuracy is about 90%.

This is AAA Class analyst report.

Vaccine or no Vaccine here….Supermax will win. It will win BIG.

Here is why we think so



Notes on ASP:

ASP USD100 - 120 for Nitrile might be the long term average post covid for medical gloves due to structural shift in demand and higher awareness in low health consciousness developing countries. Weakening dollars causing inflation will only push up the gloves asp. Rate of  new supply  will not catch up with the huge increase in demand as building new lines are slow .Especially when it comes to FDA certified medical gloves. May be only 30% of the new production coming online in the next few yrs are FDA certifed. And majority comes from Big 4 of Malaysia.Vaccine does not mean immediate control of pandemic.  Given the low efficacy of 50%-60% control of pandemic at world wide levels will take many years.

Sustaining Profit for Supermax.

Super will increase caps by 85% by 2022 and while maintaning post covid of ASP USD 100. Super will still be able to acchieve the growing quarterly profit into the forseeable future. Do not forget even without covid. the gloves market is already growing by 10% annually. With 2 x Capacity and Full OBM-X streamlined margin .Super is in the best position to be in a unforseen growth mode.

SCENARIO 1

PE 20. RM759 MILLION PROFIT

Base on pat 400M to 759M.

749/400 = 24.20 x1.87 =TP 45.00  (ex-bonus TP 22.50)

 

SCENARIO 2

PE 20 . RM1.025 BILLION PROFIT

Base on pat 400M to 1025M 

1025/400 = 24.20 x2.56 =TP 65.60 (ex-bonus TP 32.80)

 

SOME POSITIVE NOTES:

New Production lines

The latest Lines with 1.1 bill annual capacity had been commisoned and running in August. The next 1.1 bil Line will be ready in Oct to Dec.

New Venture

Annouced venturing into mask production in malaysia. 8 million units/month beginning QTR 4. What caught our attention is the collaboration with Canada Government. They hav a BEYOND Mask product which was launched recently. Another high margin product from Aurelia Canada. Dun be surprise there might be more government collaborations coming for Supermax. More info here:

https://www.shapeshift3d.com/post/shapeshift3d-announces-partnership-with-aurelia-for-the-commercialization-of-the-beyond-fit-mask

https://mybeyondmask.com/

 

Postive cash flow

For the current Qtr 4. Supermax had shown explosive Cash generating abilities. We can expect more of this to happen for each incoming Qtrs. 4 x 1 billion = 4billion cash richer after 4 qtrs. The smart management will definitely put it into good use for better returns to the company and shareholders.

Net change in cash & cash equivalents 956 million

Cash & cash equivalent at end of period 1.180 Billion

 

Prepayment 

Prepayment received from customers 892 Million. Deposit of 30-50% was received. If we take 40% as average this would imply a massive 2.23 Billion of pending orders. If we take 1.5 qtrs to fulfil, it will translate into a 1.67 billion of revenue each QTR. Further supporting our projection figure of QTR1.

 

Dividends Declared/Proposed. 

The Board of Directors has proposed a final single tier dividend via a share dividend distribution on the basis of 1 treasury share for every 45 ordinary shares held in respect of the financial year ended 30 June 2020, fractions to be disregarded. The distribution would be subject to shareholder approval at the FYE 06/2020 Annual General Meeting

 

The Consortium of Independent Analyst wish to express here is that there is more future to Supermax for the coming quarters.

 

Disclaimer…This is not an advice to buy or sell. It is just for education and sharing purpose.

CiA do not take accountability for any trading occurring from our information disseminated.

 

 

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Labels: SUPERMX

Related Stocks

Chart Stock Name Last Change Volume 
SUPERMX 7.60 -0.12 (1.55%) 50,872,000 

  54 people like this.
 
Thks1956 awesome analysis
12/08/2020 9:09 AM
Lucky Investment I gave the 1st like. Yay! :)
12/08/2020 2:14 PM
Activestream Thanks FreetoSpeak sifu as usual will always support you.
12/08/2020 2:15 PM
al8800 thanks for the detail scenarios analysis. Great job !
12/08/2020 2:16 PM
noobietrader69 good, only stupid people will sell
12/08/2020 2:16 PM
GiantPanda Excellent! World class analysis
12/08/2020 2:18 PM
cbpenbrush Support u always !
12/08/2020 2:18 PM
Targeted Stubbornly sticking to my original game plan, no thoughts of selling until December
12/08/2020 2:20 PM
DJoker89 very very details with some fact.
Thanks SiFU...TQ TQ

as always you are the best.
12/08/2020 2:20 PM
DinKetam give you MEGA likes
12/08/2020 2:22 PM
DJoker89 by just looking at the positive notes, im already at the moon
12/08/2020 2:22 PM
batman666 thanks for the write up!
12/08/2020 2:22 PM
stockarmy Thanks bro
12/08/2020 2:28 PM
see2sea VERY VERY LIKE AHH!!!! Must publish in newspaper already!!!
12/08/2020 2:29 PM
williamtkb Buy from 22 to 18. Until out of cash now.
12/08/2020 2:34 PM
Goldberg Brilliant analysis. Thanks Sifu freetospeak!
12/08/2020 2:38 PM
ninjavan1 https://klse.i3investor.com/blogs/xiaoqing88/2020-08-12-story-h1511672920-New_Vaccine_goes_Viral_in_China.jsp

is this true??? please...im losing much on supermx topglove
12/08/2020 2:40 PM
FairTalk A very good piece of detailed write up. Thank You very much for the hard work done.
12/08/2020 2:45 PM
Invest to greatness $$$$ Thanks wonderful guy
12/08/2020 2:47 PM
Power1 Thank you sifu for the great article.
12/08/2020 2:49 PM
super_newbie and vaccine yet to get official WHO approval and mass production, but Supermax had confirm earned estimated 400mil up to 12 august for Q1FY21.
12/08/2020 2:53 PM
boonlim98 Thank you for the analysis.
12/08/2020 3:06 PM
ali baba Thank you for the analysis.
12/08/2020 3:13 PM
Smile333 Thank you so much sifu freetospeak.
12/08/2020 3:21 PM
infinity888 This post deserves to be TOP 1 trending post
12/08/2020 3:33 PM
Vairocana9999 A magnificent and excellent analysis. Thanks a lot for the hard work, sifu.
12/08/2020 3:50 PM
greatful21 Thank you all CIA sifu.....
12/08/2020 5:35 PM
patrico8 Another well written and detailed article. Current price of RM 18.88 presents a great opportunity to top up, though not sure where the floor is. Spare fund on standby, just in case.
12/08/2020 5:39 PM
Equityengineer Those days once it’s closed 8.88 now 18.88 .. rocket up
12/08/2020 6:03 PM
Hockey Great article with detail calculation.
Let those investors with strong confident in the company enjoy the end result. Thanks for sharing
12/08/2020 7:16 PM
patrico8 Look at all the current quarterly reports, majority are in red, except glove counters. The champion is Supermx with 2553% increase yoy. This is a super share counter.
12/08/2020 7:27 PM
thteh Good article to share with all who hold supermax shares.Thank you
12/08/2020 8:28 PM
kytan Thanks. Is great and best simulation model. The selling price still increase 30% for aug and sep. Also Block B plant 12 will contribute Q1 output
12/08/2020 8:46 PM
Godblessyou Good analysis. Thumbs up to all the CIA Sifu. God bless you
12/09/2020 2:54 PM
inPeace Congrats freetospeak. You are always brilliant. Tqvm
11/09/2020 4:15 PM
probability EPS of Super is 5 x times higher than HARTA for the same quarter ending June 20'

Supermax has double the layer of margin with OBM

The margin edge that Harta had with AMG, Super has it twice the strength with OBM

Harta is dependent on U.S for 40% of its revenue.

Supermax has established its network worldwide, Canada, Japan, Brazil and growing....

Even if you use Harta's pre-covid price of 5.5, Supermax share price should be worth 27 plus now...

Cant Supermax earn 6 x Harta's pre-covid eps of 3 cents per qtr with its increasing capacity going forward when the pandemic is over?

Thats just 16 cents per qtr to justify RM 27 with Harta's pre-covid PE
12/08/2020 9:01 PM
andrew2020 Sifu freetospeak, bravo!!!
12/08/2020 9:44 PM
zzzz52 Through this partnership, Aurelia will take over the entirety of the commercialization responsibilities of the Beyond-Fit™ protective mask, from manufacturing to distribution, and on a global scale

WOW
12/08/2020 9:45 PM
pputeh Quote" Prepayment

Prepayment received from customers 892 Million. Deposit of 30-50% was received. If we take 40% as average this would imply a massive 2.23 Billion of pending orders. If we take 1.5 qtrs to fulfil, it will translate into a 1.67 billion of revenue each QTR. Further supporting our projection figure of QTR1. Unquote.

What about the above. Money already paid bf orders received. this is money in the kitty already. Thanks Sifu. Need to top up
12/08/2020 9:46 PM
freetospeak Good point CiA Agent @probability...


probability EPS of Super is 5 x times higher than HARTA for the same quarter ending June 20'

Supermax has double the layer of margin with OBM

The margin edge that Harta had with AMG, Super has it twice the strength with OBM

Harta is dependent on U.S for 40% of its revenue.

Supermax has established its network worldwide, Canada, Japan, Brazil and growing....

Even if you use Harta's pre-covid price of 5.5, Supermax share price should be worth 27 plus now...

Cant Supermax earn 6 x Harta's pre-covid eps of 3 cents per qtr with its increasing capacity going forward when the pandemic is over?

Thats just 16 cents per qtr to justify RM 27 with Harta's pre-covid PE
12/08/2020 9:01 PM
12/08/2020 9:55 PM
probability the below is a very rational argument sifu

Posted by freetospeak > Aug 12, 2020 9:17 PM | Report Abuse

I do not know when the pandemic will end. But i know the profit for gloves company will not drop due to pandemic over.it will be sustained by growing capacity and a higher post covid price than precovid.those who imagine the asp will drop bak to precovid level doesnt know how the glove market pricing works. Jus giv a easy example.if super hav 50 billion caps by 2022, it only need 10 sen margin per gloves it can get 800 to 1 billion profit each qtr . 10 sen profit is only usd 50/k.

Do u think supermax cannot sell more than usd50 post covid? B4 covid distributor in us is selling above this price for your info. So thats the reason super is building 5 plant at once. If u hav eliminated all agent n middleman. Super is already the king of obmX.
12/08/2020 10:13 PM
SelfMadeMillionaire russian vaccine is a joke, nobody takes them seriously.
12/08/2020 11:21 PM
qwz2604 big thumb up to your analysis and write up sifu @freetospeak. Support you all the way!
12/08/2020 11:38 PM
sniper123 thks free for your insightful thoughts on the above article but what is of concern is suddenly every country also claim they have the vaccine not only russia but USA, PRC, Germany, etc by early 2021. And since equity markets are forward looking by at least 6mths, this has generated a very negative rippling effect on the rubber glove stocks as retailers and perhaps instituitions as well will ultimately decide (and ie if they have not decided already) to take some $$&$ off the table.
12/08/2020 11:49 PM
Picanto Production capacity at end of Jun already 24b/annum or 2bil a month. Under Scenario 1, profit for NG in Q3 should be 2000 * 3 * 0.8 * 4.2 * 60.48= RM1,219,276,800.
Cost per unit: Take Q2 as an example, operating cost 418mil, production per quarter 6bil, cost per 1k unit= RM70/USD17. Effective tax rate is lower as well (around 21-22%).....
13/08/2020 12:00 AM
liewtz06 Freetospeak sifu, thank you very much for your informative insights. Always supported by facts and free to view by public. You are such a kind person.
Thanks.
13/08/2020 12:58 AM
staypositive Thank you SIR for the effort!
13/08/2020 1:18 AM
Targeted Better and better! Keep it up bros!
13/08/2020 7:08 PM


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