Stock With Momentum: Supermax Corporation

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This article first appeared in The Edge Financial Daily, on December 28, 2015.


Supermax Corporation Bhd (-ve)

Supermax (Fundamental: 1.0/3, Valuation: 0.5/3) closed 0.3% higher at RM3.42 on Wednesday. The stock has risen by 49.3% since announcing its latest quarter earnings results on November 26. 

For the quarter ended September 2015, revenue grew 11.3% y-y to RM309.9 million while net profit  surged 38.3% to RM38.5 million, boosted by increased sales of higher-margin nitrile glove and the stronger USD.

Supermax is one of the world’s largest rubber gloves makers. About 70% of its gloves are sold under its own brands, unlike other glove makers which are mainly original equipment manufacturers.

The company was recently awarded a license to supply medical gloves to the UK’s National Health Service (NHS) for the next four years. The NHS, which covers all hospitals in the UK, consumes approximately GBP50 million (about RM319.6 million) of medical gloves per year.

Supermax was last recommended by InsiderAsia on December 15, citing its comparatively  undemanding valuations and strong growth potential.