KUALA LUMPUR (Dec 11): Comfort Gloves Bhd's performance in its third quarter ended Oct 31, 2015 (3QFY16) continued to show the fruits of its expansion exercise this year, when net profit came in almost 11 times higher year-on-year (y-o-y) at RM7.17 million from RM672,000 previously.

Revenue for the quarter under review rose 59.6% y-o-y to RM61.28 million from RM38.39 million, according to the company's Bursa Malaysia filing today. The company was formerly known as Integrated Rubber Corp Bhd.

"The contribution mainly resulted from (a) successful expansion plan that was carried out throughout this year," Comfort Gloves said in the explanatory notes accompanying its 3QFY16 financials.

The Perak-based glove maker also pointed out there was a quarter-on-quarter improvement in 3QFY16. In 2QFY16, Comfort Gloves netted RM4.98 million in profit on the back of RM57.34 million in revenue.

"In this quarter, the management concentrated on cost reduction in utilities and direct materials usage," the company said, noting its gross margin in 3QFY16 improved to 16.54% from the preceding quarter's 11.73%.

On a cumulative basis (9MFY16), Comfort Gloves' net profit rose a little over 10 times to RM16.26 million from RM1.59 million.

Its 9MFY16 revenue came in 51.2% higher y-o-y at RM171.2 million, from RM113.22 million previously.

Looking ahead, Comfort Gloves said it expects the demand and consumption of rubber gloves in Asia and other emerging economies to increase, on the back of rising awareness in healthcare.

As such, it expects it "will continue to capture a bigger market share in Asia and United States, which currently contribute 80% to [its] revenue".

Further, Comfort Gloves said its expansion plan will significantly improve its profitability as it did not anticipate any increase in its existing operating fixed costs, except for depreciation and maintenance expenses associated with the manufacturing facility.

"The group will maintain its strategy of developing bespoke gloves for specific uses," Comfort Gloves concluded.

Its stock has jumped 35.4% year to date to close at 88 sen today, valuing it at RM439.14 million.

(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)