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DATE : 19 October 2020
WHAT I WANT TO SAY?
EXPECTING WITHIN (10 DAYS) WILL FLYING AND TRYING TO BREAK RM20 & HIGHER!! BUT WHY...?
1. DUE INCOMING STRONG & IMPRESSIVE QR (21Q2) WHICH IS SUPERBULL!
- Expect subsequent quarterly earnings to rise exponentially.
- ASP for months of Sept to Dec is rising monthly by between 10% to 30% indicating supply tightness have further propelled ASP higher.
- Nitrile gloves market share to gain further momentum with potential 30% growth.
- Previous quater result Profit before tax (PBT) increased significantly by RM151.2 million to RM272.8 million (about 124.3%). Mainly due higher sales revenue, lower raw material and energy cost.
- So my estimation for next 2QFY21 is about Profit after tax (PAT) 750 million++ above.
- Previous Quater Report 21Q1
2. SOLID MANAGEMENT & OUTLOOK VERY BRIGHT!
- Currently has total anual production capacity of 39.3 billion pieces and with a product mix of 96% nitrile and 4% latex gloves.
Demand for rubber gloves won’t be affected by vaccines for the Covid-19 coronavirus and will continue to outstrip supply in the next three to four years.
Spot prices for gloves have jumped 30% this quarter and expects to increase 40-50% in coming quarters for them.
Earmarked RM1.5 billion investment to build their plants, of which first two lines willbe operational by October 2021. Another RM3 billion is for its next expansion phase, its so-called NGC2, which will be fully completed in (7) seven years.
Demand for gloves to outstrip production capacity over next 3 years. Glove dipping is a long process, the expansion or transition period (to meet the demand) is at least three years.
- Order visibility or gloves is robust up to at least end of FY21
- I am foresee the acute global shortage of gloves is likely to worsen as COVID-19 cases worldwide show no sign of slowing down.
- I strongly believe and expect the situation to worsen as more western countries head toward the wintering in 4QFY20, which it could lead a further spikes in COVID-19 cases.
3. COVID-19 CASES WORLDWIDE IS NOT SHOW ANY SIGNS OF ABATING!
- Asia: 12 349 067 cases; the five countries reporting most cases are India (7 494 551), Iran (526 490), Iraq (423 524), Bangladesh (387 295) and Indonesia (357 762).
- America: 18 773 414 cases; the five countries reporting most cases are United States (8 106 752), Brazil (5 224 362), Argentina (979 106), Colombia (952 371) and Peru (865 549).
- Europe: 6 976 052 cases; the five countries reporting most cases are Russia (1 384 235), Spain (936 560), France (867 197), United Kingdom (705 428) and Italy (402 536).
USA & EUROPE
- Global coronavirus cases rose by more than 400,000 for the first time late on Friday, a record one-day increase as much of Europe enacts new restrictions to curb the outbreak.
The U.S. is staring down a ‘substantial third wave’ of coronavirus cases.
The U.S. is “facing a whole lot of trouble” as coronavirus cases continue to surge across the country, Dr. Anthony Fauci told.
- Covid-19 cases hit fresh highs for the second day in a row, as it rose to 871 cases in the past 24 hours — barely beating yesterday's record of 869 new infections.
- With this 4 points, I foresee there's no reason Gloves can't move and play within 10 days this month (October) to be rally and hit all my target.
- Today have good news about Top Gloves came out said labour issues in US DOL report resolved and seeks quick lifting of import ban. This news can be a good catalyst for gloves theme comes back with a strong rally and can be seen as a strong player in KLCI.
- Lets wait and see that "Gloves Maker and healthcare company dominated weekly volumes again this October".
LETS FLY & LETS ROCK THE GLOVES!
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