KUALA LUMPUR: RHB Research reiterated its "buy" call on Supermax Corp Bhd
on expectations of stronger earnings prospects, a potential special dividend and positive news flow.
The research house said it expects Supermax to distribute special dividends in 3QFY21 and 4QFY21 in the form of either cash or shares.
The glove makers's net cash level has surged to RM3.41bil or RM1.32 a share as at December 2020, vs RM856mil on June 2020.
It also holds 151.9mil treasury shares, which could be utilised as dividends in the form of shares or for listing purposes on the Singapore Exchange.
RHB is also expecting earnings in the coming quarter to rise on the back of better average selling price and higher sales volume due to first full-quarter contribution from Plant 12B.
Meanwhile, a 34% drop in natural gas price could lead to lower manufacturing costs as contribution to cost from utilities decline to 19% from 25% previously.
"FY21F-23F earnings are maintained as we keep ASP assumptions unchanged.
"Our FY21F-23F blended ASPs are USD89.00, USD57.00 and USD48.00," said RHB, while maintaining its target price at RM10.60.
on expectations of stronger earnings prospects, a potential special dividend and positive news flow.The research house said it expects Supermax to distribute special dividends in 3QFY21 and 4QFY21 in the form of either cash or shares.
The glove makers's net cash level has surged to RM3.41bil or RM1.32 a share as at December 2020, vs RM856mil on June 2020.
It also holds 151.9mil treasury shares, which could be utilised as dividends in the form of shares or for listing purposes on the Singapore Exchange.
RHB is also expecting earnings in the coming quarter to rise on the back of better average selling price and higher sales volume due to first full-quarter contribution from Plant 12B.
Meanwhile, a 34% drop in natural gas price could lead to lower manufacturing costs as contribution to cost from utilities decline to 19% from 25% previously.
"FY21F-23F earnings are maintained as we keep ASP assumptions unchanged.
"Our FY21F-23F blended ASPs are USD89.00, USD57.00 and USD48.00," said RHB, while maintaining its target price at RM10.60.
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