Monday, October 26, 2009
Wednesday, October 21, 2009
Saturday, October 17, 2009
Wednesday, October 14, 2009
Over the long haul, stock prices tend to track the value of the business. When firms do well, so do their shares, and when business suffers, the stock will as well. Always focus on the company's fundamental financial performance.
Analyst upgrades and chart patterns may be fine tools for traders who treat the stock market like a casino, but they're of little use to investors who truly want to build wealth in the stock market. You have to get your hands dirty and understand the businesses of the stocks you own if you hope to be a successful long-term investor.
P/S: Look at Hai-O to learn that price tracks the value of the company's business.
Monday, October 12, 2009
OSK Research has an 'overweight' rating on the sector, raising its target prices on some rubber glove stocks
OSK Research Sdn Bhd has an "overweight" rating on the sector, raising its target prices on some rubber glove stocks, in line with recent developments in the industry's spurring demand for rubber gloves.
The local research house organised plant tours to four rubber glove companies last month, namely Top Glove Corp Bhd (7113), Supermax Corp Bhd, Kossan Rubber Industries Bhd and Hartalega Holdings Bhd.
"For Top Glove, we recommend a buy with a target price of RM8.50 from RM7.40 previously and Supermax, also a buy with a target price of RM3.85 from RM2.69 previously," it said in a report yesterday.
"We are also recommending a buy on Kossan, with a target price of RM4.98 from RM4.48 previously as well as on Adventa, with a target price of RM1.87 from RM1.31 before," it added.
While it has revised its target price upwards to RM5.45 from RM4.10 for Hartalega, the research house has downgraded its call to "neutral" from "buy" previously, given that Hartalega's share price has caught up with the valuation.
OSK Research said demand for rubber gloves from the medical industry remains strong, especially from developing countries.
"But glove supply is still short. Since the H1N1 outbreak has been raised to a pandemic level, the governments of developed countries like the US and Europe have urged all healthcare multinational corps to stock up on rubber gloves, which has created short-term demand.
"Over the longer term, demand is expected to come from developing countries like China, India and Russia, which are gradually increasing their use of gloves," it said.
Also, with the US tightening its Food and Drug Administration regulations effective December 2008, the number of glove defects per batch would need to be reduced to qualify for entry to the US market.
This would reduce the supply of rubber glove exports to the US due to the retention of "unqualified"' gloves at the ports and hence create new sales opportunities for the established rubber glove manufacturers, said OSK Research.
Saturday, October 10, 2009
(8 years Historical Chart)
The Top Glove group was established in Malaysia in 1991 and is principally involved in the manufacturing, trading, and exporting of latex examination, medical/surgical, clean room, nitrile, vinyl, polyethylene (PE), high risk and household gloves. True to its name, the group is the world's largest rubber glove manufacturer, supplying about 24% of the global market.
The group was listed in KLSE's Second Board in 2001 and a year later it was transferred to the Main Board. The group acquired 60.1% equity interest in Medi-Flex Ltd (a company listed on SGX-SESDAQ) in 2007. Currently, the group has 17 glove factories (13 in Malaysia, 2 in Thailand and 2 in China) with a production capacity of 31.5 billion pieces of gloves a year. The groups exports to 180 countries worlwide, including USA, Europe and the Far East (Japan, Hong Kong and Taiwan).
The group also has upstream production with 2 plants in Hadyai, manufacturing concentrated latex and block rubber products. These 2 latex concentrated plants are able to produce 90,000 tonnes of wet latex a year and is contributing about 80% of its in-house latex concentrate consumption.
The group recently reported a 55.5% y-o-y rise in earnings to RM168.1m, on the back of 11.2% rise in revenue for FY09. As there is increasing awareness of safety and hygiene among consumers coupled with Top Glove's aggresive capacity expansion, the group is expected to continue producing good earnings growth over the next few years. Also, rubber glove business is considered a recession proof business, particularly those of latex examination and medical/surgical gloves.
Average EPS Growth Rate: 30.3%
Gross Profit Margin: 16.52%
Average P/E: 15.2
Dividend Yield: 3%
Fair Value: RM 8.49
Current Price: RM 8.23
2009 年 12月31号 总结，会将全年回筹加入本钱里，明年从 0% 开始算。
目前现金 5 / 持股 95%
持股 （买入时间） 数量 平均价(水钱)
topglove (06/05/2009) - 6.375
tienwah (11/05/2009) - 1.421
QL (14/09/2009) - 3.299
jtinter (18/06/2009) - 4.351
ksl (12/08/2009) - 1.274
gab (02/10/2009) - 6.840
3A (07/10/2009) - 0.91
目标是每年 18% 增长，持续 20 年。
我会比较注重回筹巴仙率 %，因为 (10000 赚 200) vs (1000 赚 200)，都是赚 200， 但是一个 2% 另一个却是 20%
无特定投资策略, 凭感觉，随心所欲，跟风，人买我也买，等等方法 。
× 策略1：topglove 财报公布后，可能会减持少许，视业绩和股息多寡而定。
× 策略2：KSL 不知道要怎样，已经 -9% 了。
× 策略3：QL 等公布红股 exdate.
× 策略4: 想买一只金融股，想买 HSL，jtinter
× 策略5: NESTLE 从 27 块想买到现在已经 34 块了，都还没有买。
× 策略6: GAB 应该会等到华人过年后再看看。
× 策略7: 考虑买 Maybulk。
The world's largest rubber glove maker, Top Glove Corp Bhd (7113), more than doubled its fourth-quarter net profit, driven by strong demand for its products amid the ongoing flu scare and cost-saving measures.
Top Glove made a net profit of RM56.8 million for the quarter to August 31 2009. Revenue was up 17.2 per cent to RM427.
Its full-year net profit was RM169.2 million, a 54 per cent jump, while revenue was up 11 per cent to RM1.53 billion.
This is also its best yearly net profit since 2001 and its highest dividend payout in nine years.
"The continuing strong profit growth shows that Top Glove is efficient and had adapted well to the challenging business environment resulting from cost-saving measures implemented at all factories," chairman Tan Sri Lim Wee-Chai said in a press release.
The group now had a net cash position of RM177 million and some RM197.2 million cash in the bank as at August 31 2009.
With strong profit growth, Lim said Top Glove is optimistic of its future despite ongoing global economic challenges.
"With a large customer base spread over more than 180 countries worldwide and with a diversified range of good quality products, coupled with a team of dedicated employees, we are confident in achieving continuous growth and good profitable performance in next financial year," he said.
To meet rising demand, Top Glove is in the process of installing additional nine latex concentrate centrifuge machines in Thailand with targeted completion by December 2009.
The glove maker also said it will build its 21st factory in Klang with construction scheduled to be completed in July next year. It now produces 31.5 billion gloves a year and has more than 850 customers worldwide.
Top Glove Corp Bhd's solid financial position is expected to support its expansion plan and dividend return, said MIDF Research today.
Top Glove, with a net cash position of RM176.6 million or 58.4 sen per share as at 4QFY09, has said it plans to instal 16 production lines at its factory.
The company also plans to construct a new factory, which will house 16 production lines, and targeted for complettion by July 2010.
"All in, a total of three billion pieces per annum will be added to the existing capacity of 31.5 billion pieces per annum," MIDF Research said in a research note today.
"We also believe, stock up activities will also boost orders for medical glove," it added.
Agreeing with this, OSK Research in its research note said, developing countries such as those in Latin America, China
"We continue to like Top Glove for its market leadership of a commanding 24 per cent of the global market," OSK Research added.
Top Glove, which recorded a better-than-expected result, would remained profitable on sustained demand and weaker US dollar assumption when compared with FY09.
MIDF Research said as such, it had raised its financial year 2010 forecast earning for the company by 14.9 per cent, to RM180.2 million.
Top Glove's 4QFY09 pre-tax profit rose 45.4 per cent quarter-on-quarter to RM79 million from RM54.3 million previously, while revenue climbed 14.9 per cent from RM372 million to RM427.3 million. -- BERNAMA
Friday October 9, 2009
Top Glove to beef up capacity
By EILEEN HEE
PETALING JAYA: Top Glove Corp Bhd, the world’s largest glove manufacturer, expects its two new factories to beef up production capacity by 10% next year, said executive director Lim Cheong Guan.
He said the group was in the process of installing 16 new glove production lines in the factories, both located in Klang.
“We will grow organically and add on three billion pieces capacity a year,” he told Starbiz, adding that the factories would be completed by February and July next year.
At present Top Glove has 19 glove factories and two latex concentrate plants, operating 355 production lines with a production capacity of 31.5 billion pieces of gloves per year.
The company’s two latex concentrate plants in Thailand supply 50% of its latex concentrate materials.
“In order to meet the increase demand of latex concentrate for our glove production, we will install additional nine concentrate centrifuge machines in Thailand,” he said. This is targeted to be completed by December.
The company registered a 121% increase in net profit for the fourth quarter ended August 31 to RM56.8mil or 19.18 sen per share from its corresponding quarter last year, due mainly to effective cost control, improvements in glove quality and aggressive marketing strategies which helped to sustain Top Glove’s market leader position.
Revenue increased to RM427.4mil in the fourth quarter from RM364.5mil a year earlier.
For the full year, Top Glove’s revenue was up 11% at RM1.53bil while net profit increased to RM169.2mil from RM110.1mil.
The good performance has prompted the rubber glove maker to bump up its dividend payout by 100% for FY09, from 11 sen per share.
Lim said the company was also open to further increase its market share via mergers and acquisitions, “if there is a suitable candidate.”
MALAYSIA'S largest glove maker, Top Glove Corporation, plans to reward its shareholders with a bumper dividend payout of 22 sen per share or double the previous year's, following record earnings on the back of surging demand for rubber gloves.
|H1N1 driven: Top Glove plans to boost its 19 factories by opening two more next year, with 16 production lines targeted for completion in Q1 and 16 more by July|
Seen as a natural proxy for the heightened global demand for rubber gloves after the outbreak of the H1N1 virus this year, shares of Top Glove have doubled this year, yesterday rising another 18 sen or 2.25 per cent to RM8.15, versus the benchmark increase of one per cent.
In line with the industry, Top Glove's earnings have been rising steadily as fear of the H1N1 contagion drove orders. For the last quarter ended August, Top Glove's profit jumped 121 per cent to RM55 million (S$22.5 million) on revenue of RM427 million.
Full-year earnings improved 56 per cent to RM168 million while revenue increased 11 per cent to RM1.53 billion. Earnings per share came to 57.34 sen, up from 37.18 sen previously.
Top Glove's board has recommended a special dividend of six sen a share in addition to the final dividend of nine sen per share, in view of the 'good performance and stronger cash flow position' of RM197 million in cash and free cash flow of RM260 million. An interim dividend of seven sen a share had been paid earlier.
The proposed payout was the highest since the company was listed in 2001 and executive chairman Lim Wee-Chai was confident of continued growth and 'good profitable performance' in the current fiscal year.
Malaysian companies have barely been able to keep up with the surge in demand. Top Glove's plant utilisation came to 90 per cent in the last quarter while others claim near full capacity.
Where others are cutting back, glove makers are ramping up, albeit cautiously. Top Glove's 19 factories and their 355 production lines already churn out 31.5 billion pieces annually, but the company plans to open two new factories next year, with 16 production lines targeted for completion in the first quarter of next year and another 16 lines by July.
Even cost increases - owing to higher latex prices - have been successfully absorbed by buyers; with Top Glove having raised its average selling price by 7-11 per cent. Its profit after tax margin for FY09 rose by some 11 per cent - only in FY01 has the margin been better at 11.4 per cent.
Analysts say that its defensive earnings support higher valuations, and Hwang-DBS has raised its target valuation to RM8.50 based on 14 times price earnings.
Mr Lim, who controls 35 per cent of the company he founded, appears to have taken shareholder feedback to heart. It was at a media and analyst briefing last year that he had solicited views, and found a preference for fatter dividends and more bonus shares.
Small by global standards, the glove player's market capitalisation now stands at almost RM2.5 billion. Its free float is some 51 per cent.
Thursday, October 8, 2009- Medi-Flex (60% owned by Top Glove), reported yesterday full-year FY09 core net loss of RM4.6m as
compared to a net loss of RM5.8m in FY08.
- The improvement in earnings was largely due to: 1) lower latex cost; 2) favourable exchange rate
movements; and 3) improvement in cost as the factory was relocated to Banting from a rented factory in
Klang during the year.
- HoH, revenue rose by 34.3% on the back of higher utilisation rates. 2H09's net loss, however, fell to
RM6.0m (1H09 net loss of RM2.5m) as a result of a RM4.0m write-off in inventory and property, plant and
equipment, mitigated by lower finance cost (-83.9% hoh) and lower associate losses (-48.4% hoh).
- Management did not provide any turnaround target for Medi-flex this time round but expects losses to
narrow further in 1H10.
- No change to our forecasts for Top Glove and fair value of RM8.80 (based on target CY10 PER of 15x).
TOP Glove Corp, the world’s largest rubber-glove maker, posted fourth-quarter profit that more than doubled to the highest in at least eight years as the swine flu outbreak bolstered demand for protective gloves.
Net income rose to RM56.8 million (US$17 million), or 19.18 sen a share, in the three months ended Aug 31, from 25.1 million, or 8.53 sen, a year earlier, Selangor, Malaysia-based Top Glove said today.
That’s the highest three- month profit since at least the quarter ended Nov 30, 2000, according to data compiled by Bloomberg.
The pandemic flu outbreak has raised awareness for health care and boosted global demand for protective gloves, the company said. CIMB Investment Bank Bhd yesterday raised its price estimate for the stock by 15 per cent to RM9.86 because it expected Top Glove’s profit for the year to exceed the brokerage’s estimate.
Top Glove rose 1.8 per cent to RM8.11 as of the 12:30 p.m. break in Kuala Lumpur trading, while the benchmark FTSE Bursa Malaysia KLCI Index added 0.3 per cent. The stock has more than doubled this year, after falling for two straight years.
The company said it will give a final dividend of 15 sen a share, bringing the total payment for the 12-month period to 22 sen, double the 11 sen it paid a year earlier.
The glove maker also said it will build its 21st factory in Klang, outside Kuala Lumpur, with construction scheduled to be completed in July next year. The company currently produces 31.5 billion gloves a year and exports to more than 180 countries.
Over 340,000 cases of swine flu, also known as H1N1, including more than 4,100 deaths, have been reported globally since the outbreak began in April, according to World Health Organization figures on Oct 2.- Bloomberg
Oct 07 2009
KUCHING: Top Glove Corporation’s (Top Glove) expansion plan to meet increasing demand for gloves is on track.AmResearch Sdn Bhd (AmResearch) in a research report yesterday cited that Top Glove’s twentieth and twenty-first factory are expected to be completed in February and July next year respectively.
This will enable the world largest rubber glove manufacturer to produce another 10 per cent to 34.5 billion pieces of gloves per year from an additional 32 production lines by end of the fiscal year of 2010.
The management of Top Glove indicated that orders from South American countries such as Argentina and Brazil and new markets in Chile and Colombia remain robust.
Besides that, higher average selling prices and a lower cost structure which provide better than expected sustainable margins will also contribute to higher earnings.
Top Glove is expected to report better than expected earnings results in the fourth quarter of fiscal year 2009. Its earnings in the fourth quarter of fiscal year 2009 are expected to beat its third quarter of fiscal year 2009 results of RM42 million.
The higher earnings are expected to come from the contribution of recurring orders derived from sales of basic powdered gloves to South Americans countries. In addition, the research house forecasted that the demand for rubber gloves remains robust, at a healthy growth rate of 8 per cent to 10 per cent annually.
“We estimate the Influenza A(H1N1) related buying to spur the global demand by an additional 14 billion to15 billion pieces on top of the 11 billion to 17 billion pieces from organic growth,” the research firm said.
It also raised Top Glove’s earnings forecast for financial year end 2009 to financial year end 2011 by 2 per cent to 8 per cent.
It anticipates Top Glove to achieve a net profit of RM163 million for the full year which translates into an increase of 48 per cent year-on-year (y-o-y).
“As such, we have increased our financial year 2010 and financial year 2011 dividend forecasts to 18 and 19 sen per share, respec-tively, premised on a 30 per cent dividend payout.
“However, we are keeping our forecast of 15 sen per share for the financial year 2009. We will not be surprised if the management were to choose to reward shareholders,” said AmResearch.
It also said the group is in a strong net cash position with cash holdings of RM173 million for the nine month of fiscal year 2009.
The management of Top Glove also revealed that the group would be exempted from the new 4 sen per kg levy on imported rubber for re-export. The exemption was given by the Malaysian Rubber Board for glove manufacturers importing raw latex for their production.
The research house pointed out that valuation for Top Glove remains attractive even though the stock has outperformed the FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) by 51 per cent on a relative basis year-to-date. It retained its recommendation on the group’s proven earnings deliverance backed by solid fundamentals, market share dominance in the industry, as well as better trading liquidity.
It revised the fair value of the stock to RM8.45 per share from RM8.30 per share which offers an upside potential of 18 per cent.
RHB Research Institute Sdn Bhd says Top Glove Corp's full-year earnings could exceed its estimates because of better than expected margins.
The research firm raises the fair value of Top Glove's stock to RM8.80 from RM8.00.
The shares of the world’s largest rubber glove maker, rose 4.8 per cent to RM7.82 in Kuala Lumpur trading at midday, bound for the steepest gain since July 7.
TOP Glove Corp Bhd, which has a 22 per cent global market share, is expected to continue to benefit from robust demand growth estimated at 8-10 per cent a year, Affin Investment Bank said today.
In a research note, it said the medical latex gloves industry remains a fast growing market with increased healthcare awareness in developing nations like India and China where healthcare standards and spending significantly lags behind developed nations.
Affin Investment is maintaining its 'buy' rating on Top Glove with an unchanged target price of RM8.50, pegged to CY10 PE of 14x.
"While most of its peers are expanding capacity in the higher-end nitrile gloves segment, Top Glove's focus remains in powdered gloves.
Powdered gloves are 16-25 per cent cheaper compared to powder-free and nitrile gloves and hence, is largely volume-driven, benefiting large producers like Top Glove, Affin Investment added.
Top Glove’s 4Q09 results are due to be released on Oct 7th, 2009. The investment bank expects that the strong earnings momentum recorded in 3Q09 will likely be sustained in 4Q09, backed by stronger demand for medical gloves in lieu of the H1N1 flu virus outbreak.
"Assuming 4Q09 earnings comes in on par with 3Q09, Top Glove is set to record FY09 net profit of about RM155 million (+41% yoy), largely inline with our estimates of RM149 million.
"Top Glove’s 4Q09 earnings will also be aided by a weaker ringgit versus the dollar and lower production cost, with latex prices
easing by some 38% yoy to average at RM4.14/kg vs RM6.65/kg in 4Q08," it said.
Tuesday, October 6, 2009
This has proven a very good leading indicator for the economy which will show the effect of those material inputs a few months hence. But when demand turns soft and there is less need for shipping to move bulk products around the world, the price drops. Price is very inelastic in respect to demand and the supply of ships takes time to alter. So, for a given short range of time, less than one year, it is hard to find a better indicator of near future economic activity and resultant equity market prices.
The BDI is a daily average of prices to ship raw materials. It represents the cost paid by an end customer to have a shipping company transport raw materials across seas on the Baltic Exchange, the global marketplace for brokering shipping contracts. The index is quoted every working day at 1300 London time. The Baltic canvasses brokers around the world and asks how much it would cost to book various cargoes of raw materials on various routes (e.g. 100,000 tons of iron ore from San Francisco to Hong Kong, or 1,000,000 metric tons of rice from Bangkok to Tokyo).
The index is made up of an average of the Baltic Supramax, Panamax, and Capesize indices. These indices are based on professional assessments made by a panel of international shipbroking companies.
Continue reading here.
Sunday, October 4, 2009
Profit Margin = Net Profit / Revenue
It is advised that investors should always find the company which has higher profit margin among its peers.
A higher profit margin indicates a more profitable company that has better control over its costs compared to its competitors. A decreasing trend of profit margin is not a good sign and vice versa.
Dividend yield, or DY shows how much a company pays out in dividends each year relative to its share price. A company which can always deliver a higher DY than a fixed deposit interest rate is always a preferable choice.
Dividend yield = Aggregate annual dividend per share / Share price
Calculating the dividend yield of a company is not easy, because some companies may distribute their cash via various methods.
A rapid growing company is usually has a lower dividend payout. For example, glove-manufacturing companies in Malaysia will prefer to reinvest their annual net profit to increase their factory size or install new production lines instead of paying back their shareholders.
Understanding the dividend policy of a company is also important. For example, BAT, Carlsberg and Dutch Lady have a track record of paying out more than 90% of their net profits as yearly dividend.
PE (Price Earning Ratio)
PE ratio is commonly used to value a company. It is commonly reflective of whether a company’s share price is expensive (overvalued) or undervalued.
PE = Current share price / EPS
Generally, PE ratio can be categorized as ‘Historical PE’ and ‘Forecast PE’. Since the stock market is always running ahead of current economic conditions, most of the stocks’ price is commonly reflective of the ‘Forecast PE’ valuation.
Thus, to be able to accurately forecast the future EPS and the future PE ratio of a company has become a very important factor when investing.
| 1.||Investors should compare the PE ratio of a company with its peers which fall in the same industry. It is always bias if we compare the PE ratio of the companies which falls under different industries.|
| 2.||A company that has the leadership status (in terms of market share, competitiveness, market capitalization, efficiency of economic scales etc) will normally deserve a higher PE ratio among its peers.|
The article 'Glove war amid H1N1 outbreak' can be refered as an example.
| 3.||Some companies may have a lower PE ratio all the while. Please beware of these misleading PE ratios because these companies may fall under the following categories.|
|(a)||Facing stiff competition with decreasing profit margin (locally or aboard|
|(b)||Involved in sunset industry|
|(c)||High gearing (high debt)|
|(d)||Do not have dividend payout records.|
Understanding the role of EPS in stocks analysis is vital. Take a look the following formula that explains EPS.
EPS = Earning per share
= Net profit / Total issued ordinary shares
ROE = EPS/NTA
PE = Price / EPS
From the formulae, one can see that the increase in EPS will directly lead to
1. an increase in ROE,
2. a decrease in PE.
Besides that, it may also indirectly lead to
1. an increase in positive cash flow,
2. an increase in dividend payout (thus increasing the DY)
3. a decrease in gearing ratio.
All of the above factors will finally lead to the attention of the market, hence leading to a higher rating of the stocks.
As a conclusion, the more consistent of the EPS growth of a company, the brighter the prospect of the company.
- The quality of EPS should be derived from its solid operating profit. Exceptional earnings coming from land or asset or quoted share disposals should not be taken into consideration.
- Events that can vary the projected EPS (future EPS) are important to note because the events can significantly influence the share price of a company, for example, a construction company that announces that it has won a huge contract, etc.
- For some companies that have issued warrants, the diluted EPS should be referred to instead of its non-diluted EPS.
上游 : 探测/找油，应该包刮设钻油井，油台等。(drilling,offshore hook up & commissioning)
中游 : 储存，汽油管或游船运输 (piping, vessel charting)
下游 : 提炼，制成完成品 (refining, petrochemical, petro station)
在大马，由于地理因素和政治需要，目前开采的石油大多是 off shore 的，所以也推动了shipping，vessel charting, support, maintainence 和 engineering parts / pipe manufacturing, fabrication, installation & commissioning 种种业务。
在大马，最大张的王牌是 Petroliam Nasional Bhd (http://www.petronas.com.my/)，接下来是其旗下的 Petgas, Petdag, Misc，等。然后很有可能就是有政治人物挂帅的相关公司，如 scomi, kencana，bhic 等。
Petronas: Petroliam, Petgas, Petdag, MISC
提炼： Shell, Esso
船运： Coastal, Alam, Dayang, Tgoffs，BHIC
全方位： Scomi (Scomimr), Sapcres, Petra (Penergy)
基建和设备：Kencana, Dialog, Waseong
制造： Knm, Pantech, Deleum
其他： Perisai, Saag, BIG
http://Briefing of Malaysian oil and gas companies]http://Briefing of Malaysian oil and gas companies