CiA.CONSORTIUM of INDEPENDANT ANALYST
Above is the data of gloves export from 2000 until 2020 M6.
Wave after wave of pandemic, the export of medical gloves continues to rise….this is with or without the discovery of a Vaccine.
The 2nd year after an outbreak, export of glove can increase by about 30%~40% more. Take for instance of (i) year 2004 with 2006, the increase in export rose by 34.6%, and (ii) 2009 with 2011 the increase rose by about 40%
We name each rise and ebb a “Crest”. Depending on the severity of the outbreak, the immensity for each Crest varies. The more infectious and wider spread the virus, the longer and wider the Crest will be.
If we compare the earlier pandemics with Covid 19, Covid 19’s crest have not even begin yet!!
Should we apply our mathematical projections with reference to the earlier pandemics for Covid 19, this is what you will see.
It will at least take more than 12 months years before the Crest will begin ebb. Covid 19 is a lot more severe than all the earlier outbreaks combined.
To compare how previously an outbreaks will give an impact on export and also share prices; we can refer to this graph below using Topglove as a reference.
We have selected Topglove because it is OEM’s biggest producer and its export value correlates very closely to Malaysia’s medical glove export revenues.
Its share prices will continue to run for more than 12 months at least.
Here is our summary based on the data above;
Appearance of Vaccine = INCREASE demand for more gloves.
Complete Vaccination of whole world = minimum 2-3yrs of elevated demand for gloves.
Control of pandemic announced by who = minimum 2-3 yrs from now.
Stock piling of PPE for strategic resource = 1 to 2 more yrs of elevated demand for gloves.
Total expected high demand for gloves 4 to 5 yrs.
Elevated health awareness becomes a norm for Service, Airlines, Transportation, F & B etc. Its now become NEW norm .By wearing gloves, they are projecting a good and responsible image beside being a safety SOP to be followed. All these resulted in super high demand for gloves. Even when Covid is under control.
No elimination for Covid is expected. So 3-6 mths PPE storage for every country will be ongoing forever.
Possible another outbreak of flu virus within these 5 years n beyond.
Glove stock is now an ESSENTIAL HEDGE in every funds portfolio.
The available of vaccine will further increase the asp and demand of gloves. Becoz they need to stockpile for more testing , preparation, production, distribution and disposal according to WHO SOP for every human on earth now. Never b4 seen huge demand will be coming.
Can check above link for more about gloves usage.
The available of vaccine will further increase the asp and demand of gloves. Becoz they need to stockpile for
1. More testing
according to WHO SOP for every human on earth now.
I repeat is for EVERY humann being on earth...not 21 million patients
Never b4 seen HUGE demand will be coming.
Supermax, now with exceptional margin% with OBM model, certainly deserve a rerating on PE comparable to Harta, however we had used above PE extra conservatively
TOPGLOVE = 108 (B4 Result)
HARTA = PE 107 (Ex.Result)
RUBBEREX = 83 (B4 Result)
KOSSAN = 89 (B4 Result)
COMFORT = 66 (B4 Result)
CAREPLUS = 66 (Ex Result)
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)
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)
The Consortium of Independent Analyst wish to express here is that there is more future to Supermax for the coming quarters due to its OBM advantage which allows them for dynamic pricing and super margin capitalised in early period.
We believe other Glove stock with exceptional performance in operation and profits will be OP as well during and post this unusual time.
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Disclaimer…This is not an advice to buy or sell. It is just for education and sharing purpose.
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