KUALA LUMPUR (Aug 29): Shares of Supermax Corp Bhd (KL:SUPERMX) fell on Thursday to their lowest in more than nine months, after the glove manufacturer reported its largest quarterly loss.
Supermax fell nearly 5% or four sen to 78 sen, its lowest since Nov 6, 2023. The stock was trading at 79 sen at 9.20am, giving the company a market capitalisation of RM2.15 billion. Trading volume totalled 3.4 million shares so far.
CIMB Securities in a note on Thursday expects the glove maker to return to the black from the financial year ending June 30, 2025 (FY2025), thanks to better average selling prices (ASPs) and sales volume.
Higher ASPs are expected, thanks to more conducive supply-demand dynamics in the global glove sector.
However, CIMB anticipates margins to remain at current levels due to recent strengthening of the ringgit (+7.8% quarter-on-quarter), which is not in the favour of glove makers, including Supermax.
The house has core net profit forecasts of RM31.4 million for FY2025, RM58.1 million for FY2026, RM80.8 million for FY2027 for Supermax.
FY2024
CIMB noted that Supermax's FY2024 revenue declined 21.4% due to lower sales volume and a decline in ASPs.
However, FY2024 core net loss narrowed to RM26 million, thanks to better cost control and more favourable foreign exchange rates (a weak ringgit).
The house reiterates 'hold' on Supermax, with a lower target price of 87 sen from 96 sen previously.