Monday, August 10, 2009

Rubber glove- time to take some profit

What does Ruberex & IRCB have in common, besides being among the top gainers for today? If you don't know, then you better check it out. For your information, both are rubber glove makers. Ruberex is involved in the production of household, industrial & examination rubber gloves but the core business is the production of household & industrial rubber gloves. IRCB is involved in the production of examination rubber gloves. Ruberex is fairly profitable company which reported a net profit of RM9.65 million on a turnover of RM275 million for FYE Dec 31, 2008. IRCB reported a small net loss of RM4.96 million on a turnover of RM136 million for FYE Jan 31/2009.

Ruberex & IRCB rose steadily over the past few days. The steady buying has turned into a mad rush today. Ruberex gained 27 sen or 16% to close at RM2.00 while IRCB jumped 23 sen or 42% to close at RM0.77. Both stocks are listed within the top ten gainers for today. Within that list, one can also find other rubber gloves makers, such as Adventa, Supermx & Latexx. To find 5 rubber gloves makers in the top ten gainers for today says a lot about the euphoria in this sector. While many may dream of higher prices ahead for these companies, I would however advise caution. The contrarian in me thinks that this may be a good time to take some profit.


Chart 1: Ruberex's weekly chart as at August 10, 2009_4.45pm (Source: Quickchart)


Chart 2: IRCB's weekly chart as at August 10, 2009_4.45pm (Source: Quickchart)
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7 comments:

  1. cheerMonday, August 10, 2009 8:57:00 PM

    How u think about Latexx and Kossan after you have discussed the Supermx

    ReplyDelete
  2. cheerMonday, August 10, 2009 8:58:00 PM

    What do you think about Latexx and Kossan ?

    ReplyDelete
  3. Alex LuTuesday, August 11, 2009 8:26:00 AM

    Hi Cheer,

    The resistance for the stocks are:
    - Latexx (RM2.30-2.50),
    - Kossan (RM4.40-50 & RM4.75-80),
    - Ruberex (RM2.00-2.10) &
    - IRCB (RM0.68, RM0.75 & RM0.80).

    ReplyDelete
  4. pharmacyproduct2uWednesday, August 12, 2009 6:40:00 PM

    I heard from a medical rep that there is new drug(tamiflu's generic)will be officially annouced@17/8/09 and available@ market @ 28/8/09. This new drug called omiflu & is manufactured by Duopharma which is under CCMDBIO.
    Can u comment about CCMDBIO? TQ!

    ReplyDelete
  5. Alex LuThursday, August 13, 2009 1:09:00 PM

    Hi Pharmacyproduct2U,

    Tamiflu is the trade name for an anti-viral drug called Oseltamivir. The patent for this drug belongs to Roche. Roche has granted permission to Vietnam to produce a generic version of this drug. It has also signed a sub-license agreement to produce the drug in Shanghai. An Indian company, Cipla won the case to produce a generic version of Tamiflu, called Antiflu in Dec 2008. A Thai generic oseltamivir was produced in February 2006 and was available to the public in July 2006. Based on the above, it is possible that what you've said could be true. See the link below.

    The problem is estimating the sale of this product. Besides an initial order of 1-2% of the population size by the government, future order will depend on how bad the pandemic will become. One cannot discount the possibility that the whole thing may just die down after a few months. Thereafter, the sale may be quite minimal. In addition, the profit margin may not be high.

    Technically, CCMDBIO (closed at RM2.40 yesterday) is an unexciting & thinly traded stock, caught in a range between RM1.85 & RM2.85 for the past 5 years.

    In term of valuation, it is fairly priced at trailing PE of 12 times (based on FY2008 EPS of 20 sen) and a Price-to-Book is about 2.6 times.

    Based on the above, I would give this tip a miss. While it may fly sharply higher if the pandemic worsened (which I hope it will not) but I would rated it a very speculative BUY.

    http://en.wikipedia.org/wiki/Oseltamivir#Pandemic_fears

    ReplyDelete
  6. pharmacyproduct2uThursday, August 13, 2009 6:27:00 PM

    TQ Mr Alex! Here is the latest news of CCMDBIO
    http://www.nst.com.my/Current_News/NST/articles/8antt/Article/index_html

    ReplyDelete
  7. Alex LuFriday, August 14, 2009 8:02:00 AM

    Hi Pharmacyproduct2U,

    Thanks for the info. BTW, I've learned from a friend that the generic version of tamiflu being produced by CCMDBIO is probably true.

    ReplyDelete