CGS-CIMB Research lowers Supermax earnings, cuts TP to RM2.16

On Thursday, the US CBP announced that it will seize all of Supermax’s products that enter US ports of entry. Allegations of forced labour have led to US CBP placing a withhold release order (WRO) on disposable gloves produced by Supermax and all its subsidiaries.

KUALA LUMPUR: CGS-CIMB Equities Research has lowered the earnings outlook for Supermax Corporation Bhd and slashed the target price to RM2.16 from RM3.20 after the US Customs and Border Protection (CBP) announced it will seize all of its products that enter US ports.

The research house had on Friday lowered its FY22-24F EPS by 15.3-18.5% mainly to account for: i) lower average selling prices or ASPs (higher sales to less profitable markets), ii) lower sales volume, and iii) lower economies of scale.