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Today Hartalega announced its quarterly results for 4Q FY2021. While the financial year results came above consensus estimates (RM2.9 billion vs RM2.5 billion Bloomberg consensus), many felt this quarter's results were rather underwhelming. The reasons for this are probably a topic for an entirely different post that I may never write as I don't like writing negativities about companies, especially not so when it might be largely undeserved. However, Hartalega's report might have given us an opportunity for an early peak at what results Supermax might report. According to rumours, Supermax is expected to announce its quarterly results for the quarter ended 31 March 2021 tomorrow.

Also today, the Department of Statistics released the detailed version of the March 2021 External Trade Statistics. I reported on the brief version of the report when it was released last week here. According to the detailed version, the value of rubber glove exports from Malaysia for the month of March was RM6.395 billion - significantly above an assumption I have made earlier of RM5.9 billion to RM6 billion. That is 9.4% higher than the figure recorded in February, and 260% higher than the export figure for the first month of the pandemic - March 2020.

As Top Glove, Kossan, and Hartalega have already released their quarterly reports, I did a bit of calculating. Some adjustments were needed, because Top Glove's financial quarters end 1 month before the quarters of the other 3 big glove manufacturers in Malaysia. In my calculations I divided the glove exporters in 6 groups: Top Glove, Hartalega, Kossan, Supermax, Second Liners (including Comfort Glove + Careplus + Rubberex), Others.

Based on their financial results, the breakdown of contribution to the national exports by player/group is the following:

Company/Group Q3 CY2020 Q4 CY2020 Q1 CY2021
Top Glove 36.74% 36.70% 33%*
Hartalega 13.52% 15.76% 12.83%
Kossan 9.51% 8.94% 11.68%
Supermax 13.59% 14.79% n/a
Second Liners 4.85%** 4.34%** n/a
Others 21.79% 19.48% n/a

*Top Glove's results are adjusted and potentially known only for the first two months of Q1 CY2021.

**Comfort Glove's results are adjusted as their financial quarters are one month behind the calendar quarters.

The exports of rubber gloves during Q1 CY 2021 were RM5.68 billion in January, RM5.845 billion in February, and RM6.395 billion in March. A total of RM17.92 billion for the quarter.

Based on the above, let's calculate a few scenarios:

Scenario 1: Excellent quarter for Supermax

Assuming that the contribution of the Second Liners and Others will continue to decrease quarter on quarter:

- The contribution of the Second Liners to the total exports for the quarter might be approximately 4%;

- The contribution of Others to the total exports for the quarter might be approximately 19%.

Thus, Supermax will contribute 19.5% of the total value of exports for the quarter. That would make RM3.5 billion revenue from sales of rubber gloves for the quarter.

Scenario 2: Good quarter for Supermax

Assuming the Second Liners and Others will perform in approximately the same way as in the last two quarters:

- The contribution of the Second Liners to the total exports for the quarter might be approximately 4.6%;

- The contribution of Others to the total exports for the quarter might be approximately 20.5%.

With these assumptions in mind, we can calculate that Supermax's contribution might come at approximately 17.4% of the total value of exports for the quarter. That would make RM3.12 billion revenue from sales of rubber gloves for the quarter.

Scenario 3: Average quarter for Supermax

Assuming the Second Liners and Others will perform better than in the last two quarters:

- The contribution of the Second Liners to the total exports for the quarter might be approximately 5%;

- The contribution of Others to the total exports for the quarter might be approximately 23%.

With these assumptions in mind, we can calculate that Supermax's contribution might come at approximately 14.5% of the total value of exports for the quarter. That would make RM2.6 billion revenue from sales of rubber gloves for the quarter.

A quick reminder that last quarter Supermax reported revenue of RM2 billion, and PAT of RM1.07 billion (net profit margin = 53%).

Important disclaimer: Any views expressed are for informational and discussion purposes only. None of this information is intended as, and must not be understood as, a source of advice. It is imperative that you always do your own research and that you make any decisions based on your personal situation and your own personal understanding.


https://klse.i3investor.com/blogs/bursainvestments/2021-05-04-story-h1564285873-Supermax_Can_We_Derive_Revenue_for_the_Quarter_Rubber_Glove_Exports_Up_.jsp

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