Friday, October 28, 2011

Supermax advances, CIMB keeps Buy, TP RM4.38

KUALA LUMPUR: Shares of Supermax Corp Bhd advanced on Thursday, Oct 27 on the positive outlook for the glove maker while CIMB Equities Research maintained a Buy on the stock at a target price of RM4.38.

At 9.50am, it was up 16 sen to RM3.42 with 1.49 million shares done.

The FBM KLCI rose 5.24 points to 1,463.04. Turnover was 309.44 million shares valued at RM248.12 million. There were 226 gainers, 105 losers and 197 stocks unchanged.

CIMB Research said investors should accumulate Supermax shares. At just 8.7 times FY12 P/E, the stock was trading at half the valuation of Top Glove, making it a cheaper play on the sector where earnings have bottomed on the back of more stable rubber prices.

“A strengthening distribution platform will ensure that the world’s second largest glove maker emerges unscathed from the next one to three years of overcapacity.

“Also, we gather that a bonus issue may be in the works. Supermax’s results briefing left us feeling more positive about its prospects as it is beefing up its distribution platform,” it said.

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