CIMB IB Research raises target price for Supermax to RM4.53

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KUALA LUMPUR (June 29): CIMB IB Research has maintained its “Add” rating on Supermax Corporation Bhd (SUCB) at RM4.02 with a higher target price of RM4.53 (from RM3.75) and said it remains positive on SUCB post-meeting with its management regarding its current operations and future prospects.

In a note June 28, the research house said SUCB’s Block G plant in Kamunting, Taiping is on track to resume production post full revamp works by end-1QFY19 (3Q18).

CIMB Research said this will grow its capacity 6% to 23.7 billion pieces per annum.

“SUCB is set to be the first Malaysian brand to export contact lenses to Japan. It recently received product licence for its contact lenses from the Japan government.

“We expect sequentially stronger quarters ahead from: i) aggressive capacity expansion plans, ii) higher margins from better efficiencies, and iii) stronger US$/RM.

“Maintain Add, with higher target price of RM4.53 (18.4x CY19F P/E),” it said.