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CIMB sees value in Supermax, ups rating to 'add'

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CIMB sees value in Supermax, ups rating to 'add' Empty CIMB sees value in Supermax, ups rating to 'add'

Post by Cals Mon 19 May 2014, 23:57

CIMB sees value in Supermax, ups rating to 'add'
Business & Markets 2014
Written by Jonathan Gan of theedgemalaysia.com   
Monday, 19 May 2014 10:45

KUALA LUMPUR (May 19): CIMB Investment Bank has upgraded Supermax Corp Bhd shares to “add” from "hold" on the rubber glove manufacturer's fundamentals and attractive valuation.

CIMB, however, maintained its target price of RM2.90 for Supermax shares.

In a note, CIMB analyst Eing Kar Mei said the research firm was surprised to learn that demand for Supermax's products remained strong due to its reasonable pricing, and strong own brand-manufacturing network which its peers lacked.

Eing said: “As it (Supermax shares) is trading at 10 times CY15 earnings per share, a 25% discount to the sector average, we believe that investors have priced in its foreseeable risks.”

“Fundamentals are intact with more-resilient-than -expected average selling prices. While we maintain our FY15-16 net profit forecasts, our FY14 net profit forecast is reduced by 3.5% after updating our numbers based on its 2013 annual report,” said Eing.

Looking ahead, Eing said Supermax's fourth-quarter results should be stronger as the company fully recovers from a fire incident, and impact of the natural gas price hikes.
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