The stock grabs headlines after the announcement, followed by news of Rafidah’s resignation
By MARK RAO / Pic By TMR
Supermax Corp Bhd’s share price rose after substantial shareholder and group MD Datuk Seri Stanley Thai Kim Sim (picture) issued a public apology for his past political affiliation despite its chairman resigning.
The glove maker rose eight sen to RM2.68 at close yesterday as investors brought into the counters despite uncertainty over the company’s expansion plans.
The stock grabbed the headlines after Thai issued a public apology to Prime Minister Datuk Seri Mohd Najib Razak for his involvement in the 13th General Election, which was then followed by news of the resignation of Tan Sri Rafidah Aziz as Supermax’s non-executive chairman.
TA Securities Holdings Bhd senior analyst Tan Kam Meng said the counter’s gains were largely sentiment-driven as investors look past the issues that beset Thai after he was charged with insider trading.
Thai — who helped form Supermax back in 1987 — vacated his MD’s office at Supermax in November last year after he was sentenced to a five-year jail term and fined RM5 million for insider trading.
The hightened investment risk profile led the Employees Provident Fund to cease being
a substantial shareholder in Supermax last October, leading the counter’s share price to underperform peers like Top Glove Corp Bhd and Hartalega Holdings Bhd.
The pension fund currently holds a 0.66% stake in the glove maker, while Thai remains the largest stakeholder with a 21.21% interest.
Supermax registered a strong second quarter (ended Dec 31 last year) with net profit jumping 59.1% year-on-year (YoY) to RM35.9 million, while revenue rose 41.9% YoY to RM335.91 million on stronger demand for gloves and the higher output.
Tan said analysts are expecting a positive second-half performance from the glove maker which should translate into a higher price-earnings (PE) ratio.
He noted that the lack of clarity on Supermax’s capacity expansion plans continues to hold back the stock in terms of valuation.
“This is resulting in the company’s PE to trend significantly lower than that of other glove makers in the market, such as Top Glove and Hartalega,” Tan said.
Supermax is currently undertaking two major projects in Selangor, namely Glove City in Klang and Supermax Business Park in Serendah, which are expected to more than triple the group’s glove production capacity to some 21 billion gloves annually.
TA Securities is currently valuing Supermax at RM2.70 per share and intends to revise this in the near term.