KUALA LUMPUR (July 20): Glove-maker Supermax Corp Bhd is proposing a bonus share issue of one share for every existing Supermax share held on an entitlement date to be determined later.

The proposed issuance, involving up to 1.36 billion new Supermax shares, is to reward the shareholders of the company for their loyalty and continued support for Supermax and its subsidiaries, the company said in a filing to Bursa Malaysia today.

Supermax’s issued share capital stands at RM340.08 million comprising 1.36 billion shares. The bonus issue is expected to double the number of issued shares to 2.72 billion.

Supermax delivered a strong set of financial results which saw its third quarter ended March 31 net profit jumped 106.9% to RM72.34 million as compared to the corresponding quarter last year.

The bonus issue also comes as glove counters have been posting record gains recently on the back of the worsening Covid-19 pandemic driving demand for the medical equipment, with Supermax reaching an all-time high earlier today.

On July 15, HLIB analyst Farah Diyana Kamaludin said the research firm maintained its "overweight" call on the rubber glove sector, citing pandemic-fuelled demand.

Supermax’s share price rose as much as RM1.38 or 7.8% to RM19.08 in morning trade today to an all-time high as investors bet on the rubber glove manufacturer’s potential inclusion into the 30-stock FBM KLCI.

At the midday break, Supermax had pared gains to RM18.80, with 34.56 million shares traded, almost double its 200-day trading average of 19.38 million shares. The company has a market capitalisation of RM24.07 billion.

CGS-CIMB Securities Sdn Bhd analyst Walter Aw wrote in a note today that Supermax expected global glove demand to remain robust up to at least the end of 2020’s first half owing to Covid-19.

"This was on the back of its current strong order book visibility (10 to 12 months from June 2020 with deposits collected) and higher demand from existing customers and spot buyers. Supermax also believes the acute shortage of gloves globally will be further worsened by prospects of a second wave of Covid-19 given the recent rise in the number of new Covid-19 cases globally.

“We reiterate 'add' (the call for Supermax shares), with a higher TP (target price) of RM19.60,” Aw said.