Analyst Research Report Snapshot

Title:

Result Note – Supermax (BUY, upgrade) - 1HFY12 net profit of RM58m within expectations

Price:

$23.00

Provider:

Affin Investment Bank

Date:

09 Oct 2012

Pages:

3

Type:

AcrobatPDF

Companies referenced:

SUPM.KL

Available for Immediate Download
Summary:

1HFY12 net profit of RM58m within expectations Supermax’s 1HFY12 revenue of RM480.6m (+0.3% yoy) was below our expectations, mainly due to lower-than-expected ASPs from lower latex costs. Average latex price in 1HFY12 declined sharply by -26.1% yoy, on the back of weaker global demand for natural rubber. However, the lower latex costs also helped lift 1HFY12 EBIT margin by +3.2%-points to 11%, offsetting: 1) lower contribution from associates, and; 2) a higher effective tax rate of 9.3% vs. 5% in 1HFY11. Consequently, despite flat revenue growth, 1HFY12 core net profit rose by +13.6% yoy to RM58m, accounting for 45% and 44% of our and consensus full year net profit estimates. We deem the results to be within expectations. We expect stronger earnings in 2HFY12 as Supermax benefits from time lags in passing on cost savings from lower latex costs.

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