Tuesday, February 17, 2009

Supermx- the laggard among rubber glove manufacturers

Supermax Corporation Bhd ('Supermx'), which is involved in the manufacturing of rubber gloves, should be announcing its results for 4Q2008 ended 31/12/2008 soon (probably in the last week of February). If Harta's results for the same period can be used as a guide, we can expect Supermx's results for the last quarter to be an improvement over the preceding quarter. I have appended below Supermx's last 8 quarterly results up to 30/9/2008, below.



Based on the last 4 quarters' EPS totaling 24 sen & Supermx's share price of RM1.05 as at 10.00 am today, Supermx is now trading at a PE of 4.4 times only. The depressed PE multiple accorded to Supermx will slowly be revised upward after it had decided to terminate its investment in the loss-making rubber-glove manufacturer, APLI (see my earlier post).

As noted before, Supermx has broken above its immediate downtrend line (S1S1), while the medium-term downtrend line (SS) stretching back to July 2007 is still intact. To surpass the SS downtrend line, Supermx's share price has to break above RM1.15.


Chart: Supermx's daily chart from Feb 16, 2009 (source: Tradesignum.com)

Based on attractive valuation & renewed interest in the rubber glove sector, Supermx is a stock worth investing in. I believe this stock is due for re-rating, which could come if its results for 4Q2008 can surprise analysts & investors, alike.
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4 comments:

  1. herbertTuesday, February 17, 2009 12:29:00 PM

    Hi Alex,

    I had load in 10 lots x 1.03 this morning. Hope i can sell along the rise :)

    ReplyDelete
  2. hsunlTuesday, February 17, 2009 11:01:00 PM

    Hi, try to consider the Latexx and its warrant. Attractive price. This year should be able to reach 1.20 based on new manufacturing line that is 6 billion pcs with total est eps 12cent

    ReplyDelete
  3. Alex LuWednesday, February 18, 2009 9:07:00 AM

    Hi Hsuni,

    Latexx has also done quite well for FYE Dec 2008. Its net profit increased by more than two folds from RM4.9 million to RM15.6 million, while its turnover increased by 48% from RM151 million to RM223 million. At yesterday's closing price of RM0.555, Latexx is trading at a trailing PE of 6.9 times (its FY2008 EPS is 8.0 sen).

    Its financial position is fairly satisfactory. Gearing ratio is acceptable at about 0.5 time, while current ratio is quite tight at 1.1 times.

    Chartwise, Latexx appears to have broken above its medium-term downtrend resistance at RM0.30-33. A good entry level would be at the short-term uptrend line support of RM0.50.

    ReplyDelete
  4. Alex LuWednesday, February 18, 2009 9:20:00 AM

    Hi Herbert,

    What can I say...

    I believe you are averaging up; something many resist to do, as compared to averaging down. In fact, averaging up is the proper thing to do at the beginning of a price rally. For Supermx now, you are still getting in early (I hope not too early). I am glad that your earlier entry (before this one) has worked out in your favor.

    Good luck.

    ReplyDelete