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Dear valued readers,

 
        Recent From high From low
Stock High Current % drop Low % down  20% up
Mercator 548.00 514.00 6.2% 256.00 53.3% 307.20
Topglov 9.76 8.64 11.5% 6.11 37.4% 7.33
Supermx 12.20 9.23 24.3% 5.68 53.4% 6.82
 
Performance of Mercator WA

 
  1. The share price of Mercator was at first peak at 400.00 on 28/7/2020.
  2. The share price went down south to the recent low of 256.00 on 7/8/2020.
  3. The share price rebounded to 396.00 on 3/9/2020.
  4. The share price went through a correction again and managed to close at 388.00 on 18/9/2020.
  5. The chart pattern is called "Cup And Handle Formation". 
  6. The share price crossed 400.00 on 24/9/2020 and closed at 411.00.
  7. The share price hit an all time high at 548 on 6/10/2020. 
  8. The share price had increased from 5.17 to a high of 548.00 in 2020, up 10,500% in 2020 YTD.
  9. Please go to this link to open the chart. https://www.investing.com/equities/mercator-wa
Performance of all glove stocks in 2020
 
Glove Share Price Ranking
  1. Mercator WA up 10,500% 
  2. Careplus up 4,484%
  3. HLT up 3,330%
  4. UG Healthcare up 2,646%
  5. Supermax up 1,806%
  6. Rubberex 1,502%
  7. VIP Gloves up 1240%
  8. Intco Medical 1,217%
  9. Comfort 1,213%
  10. Riverstone up 720%
  11. Topglov up 697%
  12. Kossan up 487%
  13. Hartalega up 417%
  14. Sri Trang up 364%
  15. Blue Sail up 322%
  16. Semperit up 283%
  17. Ansell up 206%.    
What is the TA chart of Supermx telling us ?
  1. The share price of Supermx peaked at 12.22 on 7/8/2020.
  2. The share price went down south to a low of 7.95 on 17/8/2020.
  3. The share price rebounded to 11.68 on 1/9/2020.
  4. The share price went through a correction again and hit a recent low of 5.68 on 10/9/2020.
  5. The share price was up on 11/9/2020 on technical rebound, the share price managed to close at 8.59 on 25/9/2020.
  6. The share price crossed 20-day EMA convincingly on 25/9/2020 and closed at 8.59.
  7. All indicators are displaying a buy signal for Supermx after the share price closed above 8.51.
  8. The chart pattern of Supermx will be almost the same as Mercator except the share price is lagging 1 week to 10 days behind Mercator WA.
  9. I expect the share price of Supermx to hit 12.20 again before the Q1 2021 result is out.
  10. The share price of Supermx had increased from 0.64 to a new high of 12.20 in 2020, up 1,806% in 2020 YTD.
  11. Enclosed is the technical chart of Supermx for your perusal.
  12. The share price of Supermx is at the beginning of Wave 3 of a Primary Wave 3. I believe the share price just completed Wave 2 of a Primary Wave 3 on 22/9/2020.
  13. I believe the share prices will continue to hit new highs until you cannot believe it if the share price is confirmed to be in Primary Wave 3.
  14. Parabolic SAR buy signal is just appearing to confirm the uptrend had started effective from 24/9/2020.
  15. MACD buy signal just appeared in the chart on 25/9/2020 after the share price crossed 8.51 convincingly. 
Projected PAT in Q1 2021 result of Supermx  
Q4 2020 result of Supermx        
Revenue = 929 million, Monthly Revenue      310
PBT = 519 million, Monthly PBT       173
Monthly Manufacturing cost        137
From analyst briefing slides dated 11/8/2020    
Assume monthly manufacturing cost increases 15%   158
Assume additional 3.3 billion capacity increase (15%).   356
July month price increases 15%      
Revenue = 356*1.15         409
PBT =  356*1.15-158         251
August month price increases 30%       
Revenue = 409*1.30         532
PBT =  409*1.30-158         374
September month price increases 30%       
Revenue = 532*1.30         692
PBT =  532*1.3-158         534
             
Total PBT (Q1 2021)         1159
Less 25% tax         290
PAT           869
PAT 120 million carried forward from Q4 2020   120
Total PAT (Q1 2021)         989
             
My strategy
  1. Compared against the performance of Mercator WA, the share price of Supermx is really underperformed. I hope the share price of Supermx can catch up in the next 20 days.
  2. During the analyst briefing after the Q4 2020 result is out, all analysts are informed that 150 million PBT or 120 million PAT was not captured in time for the Q4 2020 result. This amount is carried forward to Q1 2021.
  3. In the month of July 2020, the selling price of the glove increased by 15%.
  4. In August and September 2020, the selling price of gloves increased by 30%.
  5. I believe Q1 2021 result will be better than Q4 2020.  
  6. Look at the outstanding performance on Q2 2020 result of Shandong Intco Medical Product Company Ltd in China, I believe Q1 2021 result of Supermx will be very outstanding. 
  7. The most important criteria for the share price of stock to go up north is the growth of PAT or EPS. There is a strong growth in PAT in Q1 2021 result.  
  8. According to my calculation, PAT in Q1 2021 result is 989 million. I used the same method to calculate Q4 2020 result of Topglov, my projection is 24% lower than the actual PAT of Topglov achieved in Q4 2020 result.
  9. Based on technical chart reading, my first target price of Supermx is at 12.20 to be achieved before Q1 2021 result is out. I believe Q1 2021 result to be released will be good in view of price increase of 15%, 30% and 30% of the glove prices in the month of July, August and September 2020 respectively.
  10. I believe the Q1 2021 result will be released in October 2020. The management of Topglov can release Q3 2020 result in 11 days, I believe the management of Supermx can release Q1 2021 in 30 days.
  11. I recommend holding on to the share until Q1 2021 result is out.   
  12. I have checked many times, I believe all my assumptions stated above are achievable. Please wait for the Q1 2021 result to be released and let us verify the performance on the share price of Supermx.
  13. I will review the performance of Supermx again after Q1 2021 result is out. It is pointless to project a high target price which is not achievable in a short term period. 
Special note
This article is meant for sharing of information only, it is not a buy or sell recommendation.
 
Thank you.
OTB
寧可天下人負我, 休教我負天下人
 
Disclaimer :
Please be informed that the aforesaid stocks are solely for the purpose of education only ; it is neither a trading advice nor an invitation to trade. For trading advice, please speak to your remisier or dealer representative.
The final decision to buy is always yours.
 
 

 


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