Supermax Corporation 3QFY09 above - Supercharged
As highlighted in our preview on Tuesday, Supermax's 3Q09 results trumped expectations due to unexpectedly strong demand, greater operating efficiency and cost control. Annualised 9M09 net profit came in 23% above our projection, even better than the 15% out performance we had predicted in our preview. The company also beat consensus numbers by 32%. The 2.5 sen tax-exempt interim dividend announced was within our expectations. We are upgrading our FY09-11 earnings by 36-47%. This pushes up our end-10 target price from RM4.28 to RM6.31, still pegged to 10.5x P/E, an unchanged 30% discount to Top Glove's target P/E, which is, in turn, based on our target market P/E of 15x. In view of the favorable outlook for the company, we retain our BUY call. Potential re-rating catalysts include these excellent results, the continuing uptick in glove demand and upcoming capacity expansion plans.
-compliments of CIMB
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