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Evidence that prove JP Morgan's Jeffrey Ng analyst report on Glove is irresponsible and materially full with unreliable data


JP Morgan Jeffrey Ng's unreliable data and statement in blue (Jeffrey Ng, can you ask Jamie Dimon to ask Joe Biden and Kamala Harris why their doctor wore gloves when giving the vaccine? Oh yes, please ask your doctor that will give you the vaccine not to wear gloves too)

Truth in green highlight

Jeffrey Ng's poorly written report):

“With vaccinations now underway, we expect demand for gloves to continue to ease,” wrote JP Morgan in a research note dated Jan 11.

This is in contrast to consensus expectation that the demand for disposable rubber gloves will not shrink sharply as frontliners still need them during vaccinations.

Citing the Centers for Disease Control and Prevention of the US, the National Health Service of the UK and the British Columbia Centre for Disease Control of Canada, the American bank said medical officers are not required to wear gloves while carrying out vaccination.

“Gloves are needed only if the healthcare workers are likely to come into contact with body fluids or if there is an open wound. Guidelines also state that even after wearing gloves, constant sanitisation between each patient would be the best way to minimise the risk of disease transmission,” it wrote. - This is half baked data by Jeffrey. CDC's guidelines were updated temporarily due to PPE shortages in US. CDC said that conventional practices to return to normal once PPE supplies and availability return to normal (https://www.cdc.gov/coronavirus/2019-ncov/hcp/ppe-strategy/gloves.html). Jeffrey Ng either blatantly did not state this fact or he is not competent (did not do his homework properly before writing). Either way, he is either i. unethical or ii. incompetent.

Furthermore, JP Morgan stressed that glove prices may have peaked as testing efforts have started to plateau in most countries, especially developed ones. The bank pointed out that the current unprecedentedly strong demand was due mainly to high testing activities globally, particularly in the developed countries.  - This is one of the stupidest statement one can write. Jeffrey Ng is saying that "testing has plateau in most countries, especially developed ones".


i. US reporting record breaking cases day by day

ii. UK reporting record breaking cases day by day

iii. Brazil reporting record breaking cases day by day

iv. Germany reporting record breaking cases day by day

v. Russia curve is close to all time high

Simple question that even a stupid person can answer: If testing has plateau, how does one report record breaking cases day by day? No need to test to verify positive case?

Which is why Jeffrey Ng is the stupidest person on earth (Even a 5 year old know the answer to the simple question but Jeffrey Ng doesn't understand that record breaking cases can be achieved when testing has plateau)

“Malaysian glove producers’ aggregate market capitalisation is 86% correlated to the US daily new testing data. The high 90% correlation was due to higher hospitalisation rate, driven by more testing, which in turn leads to higher demand for medical supplies and glove,” the bank commented. -Thank you Jeffrey Ng, because you are saying that more testing means higher demand for gloves. Even though your mind is small, at least you can see the correlation between more testing and more gloves. Unfortunately Jeffrey Ng is too stupid to see the correlation between more cases and more testing.

The anticipated slower demand, JP Morgan said, implies limited upside to the average selling prices of the rubber glove. -Pretty sure Jeffrey Ng was not invited to the latest briefing. ASP expected to rise until 1H22. Writing without facts can be done by any tom dick and harry. Everyone know the fact is ASP will rise until 1H22, not 1H21.

In an earlier research note dated Jan 6, JP Morgan said it expects glove prices to reach a peak by the first half of 2021, with prices and profits to normalise thereafter.

The bank had compiled data of 18 countries, representing 17% of the world population, and found that besides India, Canada, Russia and the UK, the remaining countries it tracked are seeing a slow down in testing. -No US? US recording record high cases everyday. 17% of world population? Meaning did not include US? Why purposely omit US in data set to make your report look nice? Think people are stupid like you?

This limits the upside to glove prices, said JP Morgan, as “the more one tests, the more cases will be discovered which leads to hospitalisation and the need for medical supplies and gloves... Surges in testing created shortages which changed glove pricing from negotiated basis to spot”. -Again... US recording record high cases everyday. So no US in data set? Stupid or what?

At the time, the average selling price stood at US$140 versus US$22 pre-Covid-19, which the bank said was driven by unsystematic buying. -What does unsystematic buying mean? So what is systematic buying? Are you stupid? Covid is a pandemic, demand overshoot supply, price go up. Jeffrey Ng, you are so stupid to make this statement "unsystematic buying".

So unsystematic buying means JP Morgan CEO Jamie Dimon said he will fire any employee that buy Bitcoin but JP Morgan buy Bitcoin and cause the price to rise to much?

So, why Bitcoin's price not falling back to US$3.5k now? Because its unsystematic buying?

Seriously, what the fuck is unsystematic buying, Jeffrey?
Secured revenue growth is unsecured - What the fuck does this statement even mean?

Investors argue that the revenue growth is secured as most glove producers claim to have two or more years of order backlog, but JP Morgan begs to differ.

"It is crucial to understand order backlog and secured revenue. Orders are merely an agreement to buy a certain volume with prices determined or undecided. Buyers can walk away from it,” it wrote, noting that secured revenue is when customers have paid fully or partially for future delivery. - Again, Jeffrey Ng must have not been invited to any glove company's business updates, thus being left behind in his own world.

Jeffrey Ng says: "Orders are merely an agreement to buy a certain volume with prices determined or undecided"

Question to Jeffrey: So the prices is determind or undecided? What the fuck are you saying Jeffrey? Is prices decided or not decided? Can you answer this simple question?

Jeffrey Ng says: "Buyers can walk away from it"

Question to Jeffrey: So what if buyers walk away from it? The buyers are queueing up until 560 days (2 years). If a buyer walk away, then next buyer, please. Is this so difficult to understand?

Jeffrey Ng says: "Secured revenue is when customers have paid fully or partially for future delivery"

Question to Jeffrey: Who the fuck are you to determine what does "secured revenue" mean? Are you an English teacher? Come up with own terminology of "secured revenue" and say the definition is not met by glove companies?

Why didn't you mention customers have committed to buy at higher ASP until 1H22? Ohh... because you were not invited to listen to the facts and simply state your own "terminlogy" pluck from the sky.

"As shown in Top Glove's quarterly results, we have indeed seen a sharp spike in deposits collected, from RM60 million a year ago to the latest quarter’s RM1 billion.

"However, the deposit paid is merely 4.7% of projected revenue for the financial year ending Aug 31, 2021 (FY21). It is not even equal to a month’s worth of glove sales," said JP Morgan. - This is the part where every person on the street start to suspect Jeffrey Ng's competency. He clearly does not know how "systematic" spot orders work

1. Deposit is only for SPOT Order. How the fuck can you compare 1bil SPOT order sales with 2021 full year sales that have both Spot and non spot order? Why so stupidddd?

2. 1Bil deposit is only for the next month. Fact: Do Jeffrey Ng know what "SPOT" order mean? Since he is English teacher wannabe, he should know what the word "SPOT" means

3. Deposit is collected month on month. He assume 1bil is for full year 2021. Fact: It should be minimum 12bil for full year 2021.

4. The deposit does not roll over. Once the next month come, the 1bil is wiped out as contract liabilities in balance sheet

JP Morgan maintained “underweight” calls on Top Glove Corp Bhd with target price (TP) at RM3.50, Hartalega Holdings Bhd (TP: RM8.50) and Kossan Rubber Industries Bhd (TP: RM3.80).

However, it cautions that the risks to the calls on the three glove producers include a second global wave of Covid-19 which could lift glove prices to new heights, unscheduled capacity shutdowns, a significant fall in input costs such as nitrile and natural rubber, a significant step-up in dividend payouts as well as a substantial degree of ringgit depreciation. - Stupid Jeffrey, all your risk already happening:

- Second global wave (US already in unlimited wave, UK already in unlimited wave, Israel (despite vaccinated so many people) still in unlimited wave

- Unscheduled capacity shut down (Topglove shut down their plant for few weeks, ain't it?)

- Significant fall in input costs (Gas prices went down, why only mention nitrile and NR?)

- Significant step up in dividend payouts (Topglove already said increase divdend to 70%?)

- Substantial degree of ringgit depreciation (since 1st day of 2021, USD slowly creeping up against MYR, no?)

At noon break, Top Glove fell five sen to RM6.63, giving a market capitalisation of RM54.54 billion. Hartalega dropped 12 sen to RM13.02, with a market capitalisation of RM44.76 billion. Kossan fell five sen to RM4.51, with a market capitalisation of RM11.51 billion.


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