Comfort Rubber Gloves

Comfort Rubber Gloves

Postby winston » Wed Oct 17, 2018 8:51 am

not vested

Trading Buy: COMFORT - 2127
(Last price: RM0.855, Potential upside +17.0%)

Company Profile
• Comfort Rubber Gloves (CRG) offer wide range of Nitrile and Latex specialty examination (powdered & powdered-free) gloves, contributing about 15% and 85% to group revenue respectively.

Trading Catalyst

• We opine that the sluggish 1HFY19 results (mainly driven by the one-off logistics expense related to restrictions slapped by the US FDA) and FDA Import Alert list have been largely priced in.

• Valuations are undemanding at 14.1x FY20E P/E (50% below peers), supported by positive 11% FY19-21 EPS CAGR and potential further boost in US sales following the Pacewell’s acquisition as it possesses a 510(k) FDA license.

• Oversold and pending a technical rebound towards RM0.96-1.00.


Technical View
• Resistance: RM0.895 / RM0.960 / RM1.00
• Support: RM0.830 / RM0.800
• Cut loss: RM0.790

Key Financial Stats
• Trading at 14.1x FY20E P/E (50% below peers' P/E), supported by a positive 11% FY19-21 EPS growth.

Source: HLIB
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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winston
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Re: Comfort Rubber Gloves

Postby winston » Thu Apr 23, 2020 9:48 am

not vested

Comfort Gloves share price should fly relatively faster

by Koon Yew Yin

20 Apr 2020

Due to the Covid 19 pandemic the demand for rubber and nitrile gloves far exceeds supply. As a result, glove price continues to go up higher and higher and all glove manufacturers will benefit.

As you can see, all the glove manufacturers’ share prices have been going up recently. Based on historical earnings, Hartalega is selling at P/E about 60, Top Gloves is selling P/E 44, Supermax is selling at P/E above 20. Rubberex and Comfort are selling below 20.

Rubberex has a much larger new plant which was scheduled to start operation in June, but it is being delayed by MCO.

Comfort:

Comfort’s annual account closes in January 2020. Comfort has six new lines commenced operation in Feb 2020. This, alongside the existing 49 production lines in the two plants in Simpang and Matang, Taiping, are running at close to full capacity, which collectively can produce between 430-450m pieces of gloves/month.

The commencement of the new lines was timely as it helps to cater for both existing demand as well as the global surge in demand – arising from the unexpected outbreak of the COVID-19 pandemic.

Beyond current expansion, more capacity may be added in the future, as the company had acquired about 39 acres of land in Perak in 2018 that can potentially house more capacity ahead.

As demand for nitrile and specialty gloves increase, the potential capacity expansion can help to capture more market share moving forward.

As I said, the additional manufacturing capacity since February is timely to take advantage of the higher glove prices. Its 1st quarter result ending April 2020 should be much better than its previous quarters.

Among all the glove manufacturers, Comfort has the best profit growth prospect which is the most powerful catalyst to move share price.

https://klse.i3investor.com/blogs/koonyewyinblog/
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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winston
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Re: Comfort Rubber Gloves

Postby winston » Wed Jun 03, 2020 11:43 am

not vested

Comfort

Comfort produces 5.4*1.12 = 6.048 Billion rubber gloves a year. 85% is Nitrile gloves, 15% is Latex gloves.
Comfort produces 5.14 billion Nitrile gloves a year (85%)

Assume the selling price of Nitrile glove at USD 0.03 per piece or RM 0.126
Total revenue of Nitrile gloves = 5.14 billion*RM 0.126 = 647.64 million

Comfort produces 907.20 million Latex gloves a year (15%)
Assume the selling price of latex glove at USD 0.02 per piece or RM 0.084
Total revenue of latex gloves = 907.20 million*RM 0.084 = 76.20 million

Grand total revenue = 647.64+76.20 =723.84 million

At 30% margin, PBT = 217.15 million
Assume 20% tax, PAT = 173.72 million

NOS = 583 million
EPS = 173.72/583 = 0.30

If PER = 20, the target price = 5.96.
If PER = 26, the target price = 7.75.

Source: Koon Yew Yin

https://klse.i3investor.com/blogs/koonyewyinblog/
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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winston
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Re: Comfort Rubber Gloves

Postby winston » Thu Jun 25, 2020 8:21 am

not vested

Comfort: my revised target price to include tax

by Koon Yew Yin
21 Jun 2020

Please ignore my previous article namely “Comfort: my target price” which I did not consider tax for the additional profit.

After I read the following statement from Top Glove quote “Top Glove recently highlighted that 20 per cent of its new capacity would be allocated to spot price, between US$80 and US$100 for 1,000 pieces.” unquote. The price increase is more than double the normal price. That is why Top Glove’s profit is increasing so rapidly.

The increase of the selling does not cost the company anything. It is pure profit.

To be safe I cannot assume Comfort to double its selling price in the next quarter but it can gradually increase to double its selling price in the 4th quarter. In addition, I must consider the additional tax involved.

Assuming 100% minus 30% tax = 70% for 3 quarters. That is 23% per quarter.

1st quarter sale Rm 152 million, profit Rm 16.34 million

2nd quarter sale increases 23% of Rm 152 = Rm 35 million; profit Rm 16.34 million + Rm 35 million = Rm 51.3 million

3rd quarter profit Rm 51.3 + Rm 35 million = Rm 86.3 million.

4th quarter profit Rm 86.3 million + Rm 35 million = Rm 121.3 million.

Total for the year profit Rm 275.3 million

Total issued shares 580 million

EPS 47 sen

Based on P/E 20 target price Rm 9.40
Based on P/E 15 target price Rm 7.05
Based on P/E 10 target price Rm 4.70

(Comment: Based on P/E 7.5, Target Price RM 3.55; Based on PE 5, Target Price is 2.35)

https://klse.i3investor.com/blogs/koonyewyinblog/
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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