the global demand on latex gloves has been growing exponentially in recent years. Since this growing trend of glove market is not likely to stop for the coming years (though it may slow down gradually) , the latex glove manufacturers will benefit a lots from it.
Malaysia's companies are the largest suppliers of latex gloves in the world. There are several latex glove companies listed on Bursa Malaysia. Here's a simple comparison based on their annual report FY2006:
Obviously, the three largest companies are:
The huge production capacity of these companies ensure that they can produce gloves with lower cost than their competitors. Hence they can maintain their profit margin while keep the selling price competitive. When I decided to buy a glove company, I only considered this three biggest companies. After doing some study, I've chosen to invest in Supermax.
The first reason is Supermax has a better earning power. I've create a table to make a comparison between 3 companies:
(I don't have the EBITDA data of Kossan, but the comparisons of EBITDA should be similar to PBT and PAT)
|PAT '2006 (RM million)|
No. of share (million)
|Earning per share (sen)|
|Share price (RM)|
Equity per share(RM)
* the no. of share & equity per share are based on the latest quarterly report.