Weekly Equity Flyer: 27 December 2011 - Latexx & Supermax

27 December 2011

1. LATEXX PARTNERS BERHAD  (stock code: 7064)

Latexx 3Q net profit falls 27.8% to RM12.73m

Latexx Partners Bhd's net profit for the third quarter ended Sept 30, 2011 fell 27.8% to RM12.73 million from RM17.63 million a year earlier, due mainly to the persistently high raw material prices and the weaker US dollar. The company said that its revenue for the quarter slipped 6.2% to RM121.81 million from RM129.88 million in 2010. Earnings per share decreased to 5.17 sen compared to 8.19 sen in 2010, while net assets per share was RM1.23.

Did you know?

The company is currently on an aggressive expansion plan. The current capacity is 6 billion pieces of gloves annually. By 2013, a target of 12 billion gloves is set. And, by year 2015 to achieve a shipment target of 15 billion gloves per annum.

Rationale

Latexx is highlighted this week based on the following points: -

Currently trading at a Low P/E of 7.9x
High Return on Equity (ROE) of 32.4%
High Return on Capital (ROC) of 23.8%
High Return on Asset (ROA) of 17.9%                                    


2. SUPERMAX CORPORATION BERHAD  (stock code: 7106)
Supermax to grow sales with additional capacity

Glovemaker Supermax Corporation Berhad is looking at growing its sales with the expansion of its capacity. It also hopes to set up a distribution centre in China to expand its presence there. Executive chairman and managing director Datuk Seri Stanley Thai told a media briefing Supermax expects additional capacity for surgical gloves from its Lot 42 plant. This could bump its output to 336 million pairs of surgical gloves per year from 30 million currently. The additional sales are expected to be around US$67.2 million (RM200 million) with a 15% profit margin, which could yield a profit of some US$10.1 million, he said.

Did you know?

Supermax Group produces up to 16 billions pieces of gloves per year, meeting approximately 11% of the world demand for latex examination gloves. Supermax Group has nine (9) manufacturing plants based in Malaysia equipped with the state-of-the-art machinery, energy-saving biomass system and a research and development centre.

Rationale

Supermax is highlighted in this week's flyer based on these points: -
Currently trades at 11x PE which is lower than the industry average of 14.16x
High ROA, ROE and ROC of 15.8%, 25.4%, and 18.6% respectively                              


Happy Trading!

(Information from MBB)