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TYYAP 23 Nov 2020

With the latest news in regards to Topglove factory closure in phases, it is believe that the production output from Klang maybe affected but it may not necessarily a badnews for all glove manufacturer.

Assuming most glove manufacturer capacity has already been taken up, this short term shortage may support and best still push the ASP of glove higher during this short term

periods.

As such if we assume the big 4 glove recent financial

Supermax which business module is OBM in nature may be able to benefit from this ASP hike.

Given it's latest EPS of 30.58 cent, it is highly possible for it achieve the same EPS throughout the Financial Year 2021.

With a conservative estimate that their earning stay the same EPS 30.58 x 4quarters = RM1.22

With an EPS of RM1.22

If we assume

PE10 = Share Price is RM12.20

PE15 = Share Price is RM18.30

While other OEM glove manufacturer if i employ the same assumptions

Hartalega latest quarter EPS of 15.95 cent,

Hartalega has previously informed there will be more than 30% increase in ASP for it's next quarter which may translate to a possible

earning of EPS 27.6 cent

Thus trailing 4 quarter EPS may achieve RM0.9695

If we assume,

PE10 = 9.69

PE15 = 14.54

Kossan latest quarter EPS of 13.60 cent,

Kossan has previously informed there will be more than 30% increase in ASP for it's next quarter which may translate to a possible

earning of EPS 25 cent

Thus trailing 4 quarter EPS may achieve RM0.886

If we assume,

PE10 = 8.86

PE15 = 13.20

Kossan

Topglov latest quarter EPS of 15.95 cent,

Topglov coming quarter is estimate to achieve 2billion which will give an EPS of 0.244 if we factor the latest news on the closure of

factory it was estimated to affect their whole year profit by a meager 1.9%

Thus trailing 4 quarter EPS may achieve RM0.850

If we assume,

PE10 = 8.50

PE15 = 12.75

From the above

Supermax seems to have the best upside movement in mid to long terms.

However it will depends on the movement of ASP

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