In December last year, the major shareholder of Supermx, Stanley Thai was charged for insider trading relating to the counter, APLI. As a result, the share price of Supermx took a dive from RM2.00 to RM1.60.
Supermx is one of the top 4 rubber glove manufacturers in Malaysia. At the current price (about RM1.84 at the time of writing this post), it is very attractively priced.
![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjgTlS6HlIhRsAkxGATqCETMtdxV9dmP1QkxzFW3gqzTvA2AsQg4iaQKyp8k4Q95daLNyKXsS2KEga3_vFwXTfxa_lTzAZ8yyQ7ZsFdSW1SbRNajXY9C3QNFlSMGSxP6N38rQQg/s280/Rubber+glove+valuation.gif)
Table 1: Rubber Glove Manufacturers' valuation summarized
![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg6RWGKCr8ZOtzAuz7X8XLLwCi0WdA7fm0errfqlTMkwlu-Qc9wX48CGlopC6kAjTYdYzyrN21BQE3LGkS3ij-vd41kMbYmS8pTbKJHfJIUHyuDyn8pI822c59habHkxkVMC0Gk/s1600/Rubber+glove+@20140113.gif)
Table 2: Rubber Glove Manufacturers' key statistics (Source: ShareInvestorscom)
Recent Financial Performance
The company has a track record of financial performance, with steady growth in revenue & profits. The growth track record has slowed tremendously in the past 3 years due to fierce competition & relentless capacity expansion in the sector.
![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhQP8rmYvjnVaV4aaq_gP0QKIANSbRicHCPbt91M17L0bWo2BQ2dNnJvN_y7WIc2wfOunXwm0Z71tjAhKtytGsiCHPl9Si-oW0oxKEU7UAsWXGGT0sc62gneDLx8GO5nZygZ0jO/s280/Supermx's%2B10Y%2BP%26L%2B%26%2BCF.gif)
Diagram: Supermx's last 10-year P&L & 6-year CF (Source: ShareInvestorscom)
Financial Position
The company's financial positions are as follows:
1. Liquidity & leverage position is healthy
2. Management efficiency stagnated in the past 2 years due to over-capacity in the sector
3. Valuation multiples have eased off; thus making the stock more attractive
4. Revenue growth slowed while profit margin slid back
![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgX0mwml2B5EmrP2QBALx9ofvpdD4d3aEes6viW7Mo0Ozf1Rd_43Qw0v29hL7jQ2H8ixOg2dRx9pl1ET5G2e3JPUPIzYBtZvDVgeEvEtyJHll-DS2BFwvzB0ojvG3NHPc-PJJDv/s280/SAMPLE+FUNDAMENTAL+SNAPSHOT_SUPERMX.gif)
Chart 1: Supermx's Financial Ratios (Source: ShareInvestorscom)
Technical Outlook
Supermx has broken its long-term uptrend line. The stock could potentially test its next horizontal support at RM1.20.
![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhjYHoNRa18BsHUZYeCvu6vDUoFX_monDMlEkWbiBeXwTD4VIEyDIyZK71FDFHpnrFhnLecunjXDdzHuQ79S-Hyqrs9tIkAM7YMq4YqDJL89GwL1wYkoL5IA5rKubwK2XMGGLu9/s1600/Supermx+m20140113_11.00am.gif)
Chart 2; Supermx's monthly chart as at Jan 13, 2015_11.00am (Powered by ShareInvestor.com)
Conclusion
Based on good financial performance & position, attractive valuation, Supermx could be a good stock for long-term investment. However, its bearish technical outlook could signal further downside to the stock ahead.
Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, Supermx.
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