Supermax Optimistic Of Bullish Financial Performance This Year

April 15, 2010 - Glove maker Supermax (7106.KU) +1.7% at MYR7.10, may retest intraday high of MYR7.19 later, on expectation of strong 1Q results, says dealer with local brokerage. "We expect a strong performance by the company on both on-quarter and on-year basis," says CIMB Research's analyst Terence Wong; doesn't have quarterly projections, but forecasts Supermax to post net profit of MYR170.1 million in FY10 vs MYR129.8 million in FY09. "We strongly believe that industry prospects remain favorable and Supermax is one of the key beneficiaries," says Wong; adds, views current share price weakness as great buying opportunity as expects strong results next week (expected after 0900 GMT Monday) will assuage investors' fears. "Our earnings forecasts and target price are under review and FY10-12 earnings may be raised by 23%-25%," says Wong, who has a Buy call, with MYR9.65 target on stock.(elffie.chew@dowjones.com)

SUNGAI BULOH, April 14 (Bernama) -- Supermax Corporation Bhd is optimistic of a bullish financial performance this year as its expects earnings per share (EPS) for the first quarter of 2010 to exceed its earnings guidance for the year.

Executive Chairman cum Group Managing Director Datuk Seri Stanley Thai said the company was revising its EPS target from a minimum of 50 sen per share to a minimum of 62 sen per share for the financial year ending Dec 31, 2010.

He said the revised profit guidance for the current year took into account latex price fluctuations, foreign exchange and the possibility of a hike in natural gas and electricity tariffs.

Supermax, the world's second largest rubber glove manufacturer, is expected to announce its first-quarter results soon.

It had projected a turnover of over RM1 billion for the current financial year based on current latex prices, the expansion of two new plants and the installation of new production lines.

Thai said the new production lines and the construction of two plants in Meru and Bukit Kapar, Klang, would require an investment of RM130 million.

"The plant in Meru is expected to be fully commissioned by June or July while the plant in the Glove City project in Bukit, Kapar, is expected to be commissioned by 2011," Thai told reporters after International Trade and Industry Minister Datuk Seri Mustapa Mohamed's visit to Supermax's factory here Wednesday.

For the financial year ending Dec 2011 Supermax projected a revenue of RM1.5 billion.

Thai said the rubber glove industry was a resilient industry and would not be affected by price increases nor the strengthening ringgit.

Shares of rubber glove manufacturers were among the major losers yesterday, after rubber prices surged to a 20-month high in Japan while the ringgit strengthened against the US dollar.

Thai said some of the issues affecting the Malaysian rubber industry and Supermax were the non-availability of natural gas supply for new expansion projects, need for consistency in foreign labour policies, lack of advance notice of utilities rate hike, increasing cost of doing business and shortage of quality middle management staff.

Meanwhile, Mustapa told reporters he strengthening of the ringgit had no impact on Malaysian exports as other regional competing currencies have also advanced.

"The issue is how can we attract Malaysian talents to return home. This is in line with the new economic model," he said.

-- BERNAMA