KUALA LUMPUR, Nov 10 — The share price of gloves manufacturer, Supermax Corporation Bhd, declined in the morning session after posting a lower-than-expected third quarter financial results.
At 12.30pm, Supermax share price erased nine sen to RM2.24 with 3.18 million shares changed hands.
Affin Hwang Investment Bank, in a research note, said Supermax’s nine-month net profit of RM80 million made up only 62 per cent of its full year estimation and 64 per cent of consensus forecast.
“This was attributed to weaker revenue on the back of lower production output and lower average selling price,” it said.
RHB Research, in a separate note, said it cut Supermax earnings forecast for financial year 2014 and financial year 2015 by 17 per cent and 23 per cent respectively on assumption of a lower utilisation rate and average selling price.
“We expect FY14 earnings to be dragged by Supermax’s first half results. It takes time for the company to fully commission its production lines, and it continues to face a challenging operating environment with declining raw material costs resulting in a downward revision in average selling price assumptions,” it said.
Other contributing factors are a rise in other operating expenses (other than raw materials) and intensified competition within the glove industry.
Affin Hwang Investment downgraded Supermax to “reduce” call from “add” with a lower target price of RM2.17, from RM2.52, previously.
RHB Research maintained a “neutral” view on Supermax but revised downwards its target price to RM2.16, from MYR2.31, earlier. — Bernama
