FIGURE 1: SUPERMAX
CORPORATION BERHAD LAST 2 YEARS SHARE PRICE TREND
**analysis
based on 2019 annual report.
1.
GENERAL INTRO: Supermax is one of the major
glove manufacturers in Malaysia.
2.
NOTABLE POINTS:
a. in
2019 report, Supermax stated that the company’s products export to 165
countries, in progress building its 12th plant to increase production capacity,
plant #13, #14 and #15 are in planning stage estimated capacity will increase
up to 27 billion pieces per annum by 2020
b. Supermax
also has a contact lens division which was started in 2014, investment-to-date
is around RM 100 million, currently already obtained license to market contact
lenses in 60 countries
3.
IS THIS COUNTER A STRONG GROWTH STOCK?
a. REVENUE
RANGE (million): ~1538 million in 2019 annual report, this is a high revenue
company.
b. SHARE
PRICE: from 2015-2019, share price dropped significantly in 2019 due to stock
splitting. Most of the time share price steady at around RM1.40
c. EARNING
PER SHARE (EPS): earning per share in last 5 years increased by around 33% from
7.05 to 9.39 sen, indicating a good growth potential of this counter
d. FUTURE
POTENTIAL/PROSPECTS: quite dependable and reliable counter, share price expected
to be stable.
e. CAPITAL
EXPENDITURE (CAPEX): spending on purchase of new fixed assets is RM 112
million, around 6% of total assets, due to factories expansion.
4.
IS THIS A STRONG DIVIDEND STOCK?
a. DIVIDEND
YIELD: in 2019 report, Supermax declared a total dividend payout of 2.5 sen per
share, amounts to dividend yield of 1.75 % based on current share price.
b. CONSISTENCY:
consistent dividend payout, last five years (2014-2019) dividends declared range
from 2 to 6 sen per share.
c. DIVIDEND
PAYOUT RATIO: in 2019 financial year, Supermax paid out about 26.7% of its
earnings to investors in the form of dividend.
5.
IS THE MANAGEMENT PERFORMANCE GOOD?
a. RETURN
ON EQUITY (ROE): in 2019 financial year, Kossan Rubber achieved a good return
of shareholders’ equity, at 11.4%.
b. COST-TO-INCOME
RATIO: cost-to-income ratio is quite high at about 792%, but lower than Top
Glove, which reported a cost-to-income ratio of about 1000%
6.
OTHER INDICATORS:
a. CASH
FLOW: cash flow is positive, around RM 173.7 million, equivalent to RM 0.13 per
share
b.
SUPPORT BY INSTITUTIONAL INVESTORS: this counter
is well supported by institutional investors, there are 24 institutional
investors at top 30 major shareholders list, including few insurance companies and
investment funds.
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