Friday 01 Dec 2023
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KUALA LUMPUR: Supermax Corp Bhd, the world’s second-largest rubber glove maker by volume, is understood to be diversifying into the contact lens business, according to sources. 

Two sources told The Edge Financial Daily that the company is getting its production line to manufacture contact lenses ready for commissioning in June or July. 

“[Datuk Seri Stanley] Thai sees potential in this [contact lens] business; he sees there is demand in the market,” said a source, referring to the group’s executive chairman-cum-group managing director.

“Supermax has established its distribution network globally, and this new business segment will seek to leverage on that and also serve as an alternative revenue stream for the company,” another source added, noting that this business segment is lucrative, with gross profit margins of up to 60%.

In fact, Supermax (fundamental: 1.0, valuation: 0.6) last year in March announced to Bursa Malaysia that it had incorporated a 98%-owned subsidiary known as SuperVision Optimax Sdn Bhd. 

The remaining 2% in SuperVision Optimax is held by Ting Chong Chai. According to online reports, Ting was the head of engineering and technical development at Clearlab, said to be the world’s first biocompatible daily disposable contact lens manufacturer. 

SuperVision Optimax has an authorised share capital of RM5 million, with an initial issued share capital of RM100. 

The rationale for incorporating SuperVision Optimax, cited Supermax, was to add additional product lines into its existing global distribution network and overseas distribution centres.

“The intended principal activity of SuperVision Optimax is to carry on the business of manufacturing, sales, marketing and distribution of related healthcare products to the global markets and through the existing global distribution network and our overseas distribution centres,” said Supermax. 

In a recent media interview, Thai was reported as saying that Supermax was venturing into a new generation business of “high-end medical devices” to diversify the group’s earnings base. The new business was not revealed. 

Thai, was also reported as saying that the production of gloves will remain as Supermax’s core business. 

Thai together with his wife and executive director Datin Seri Cheryl Tan, hold 35.6% of Supermax.

The manufacturing of contact lenses will most likely be operated at Supermax’s current manufacturing facility in Sungai Buloh, Selangor.

Analysts shared the view that the outlook for glove makers is better this year on the back of the stronger US dollar and weaker commodity prices. Local players have started to increase their capacities.

“This [diversifying] move could prove to be positive for Supermax, if they can afford to focus and execute it well. Note that Supermax has always been trading at a discount compared with its peers, as their expansion plans have been delayed,” an analyst with a local bank-backed research house told The Edge Financial Daily.

The analyst said one thing that has defined the Malaysian rubber glove sector, compared to other countries, is that it is focused.

Supermax was trading at a rolling 12-month price to earnings of 13.06 times, according to The Edge Research. 

This compares with Top Glove Corporation Bhd’s 17.29 times, Hartalega Holdings Bhd’s 31.58 times and Kossan Rubber Industries Bhd’s 24.41 times.

Supermax’s counter fell 18.1% from its opening to an intraday low of RM1.561 on Dec 15 when Thai and his wife were charged with insider trading.

It closed two sen lower last Friday at RM2.15, giving it a market capitalisation of RM1.45 billion. 

The Edge Research’s fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations. Go to for more details on a company’s financial dashboard.


This article first appeared in The Edge Financial Daily, on March 16, 2015.

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