RHB raises earnings projection for Rubberex


KUALA LUMPUR: RHB Research anticipates strong earnings from Rubberex Corp Bhd in its upcoming results as its product average selling price (ASP) could have been higher than expected.

The research house said this was based on the results and outlooks shared by Hartalega Holdings Bhd and Supermax Corp Bhd, which announced their earnings in October.

"We expect Rubberex to announce its 3Q20 results by the end of the month. In view of its high glove ASP for July-September, 3Q20 earnings should double QoQ and surge >10 times YoY," it said.

RHB lifted FY21-23F core earnings by 48-136% on higher ASP assumptions. In line with the upgrade, it reiterated its "buy" recommendation on the stock and raised its target price to RM3 from RM2.20 previously.

Meanwhile, nitrile glove production capacity is expected to surge 150% quarter-on-quarter.

According to RHB, Rubberex has completed building its new factory and is in the final round of trial runs to optimise the production process.

"We expect earnings contributions from the new factory to start in December, so 4Q20 earnings should be much better QoQ.

"For the nitrile gloves segment, Rubberex’s capacity will increase 150% to 2.5bn ppa from 1.0bn ppa currently, once the factory is ready in December," it said.
Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3
Join our Telegram channel to get our Evening Alerts and breaking news highlights

RHB Research. Rubberex , gloves

   

Next In Business News

CPO futures seen trading higher next week on improved sentiment, may hit RM5,050
US to lift restrictions Nov 8 for vaccinated foreign travelers
China aluminium firm Zhongwang flags 'severe difficulties' at subsidiaries
Toyota cuts November output, after supplies slowed from Malaysia and Vietnam
Oil prices rise to three-year high on back of supply deficit forecasts
World stocks notch best day in 5 months
DNB gets Malaysia ready for 5G
Telcos post-5G rollout
Short Position - Listed companies, healthcare valuations, demographic dividend
A perfect storm driving energy prices

Others Also Read


Vouchers