KLCI Stock - LATEXX / 7064 - 2010 Quarter 3

LATEXX PARTNERS BHD

Company Description

LATEXX PARTNERS BERHAD, an investment holding company, engages in the manufacture and sale of rubber gloves in Malaysia. Its products include ambidextrous pre-powdered latex examination gloves, powder-free latex examination gloves, powder-free nitrile examination gloves, controlled environment powder-free latex gloves, and high risk powder-free latex gloves. The company provides examination gloves for professionals who perform medical-examination, and diagnostic and therapeutic procedures, as well as in the fields of dentistry, high-tech manufacturing, and food-processing. It also involves in property investment activities. The company has a joint venture agreement Total Glove Co Sdn Bhd and Budev BV to engage in the business of treating natural rubber latex examination and surgical gloves. Latexx Partners Berhad is based in Kamunting, Malaysia.

Company Info

Listing Date	1996-01-31
Market Capital (Capital Size)	566,750,715 (Medium)
Par Value	RM 0.50
Board	Main
Sector	Industrial Products
Major Industry	Gloves
Sub Industry	Gloves Manufacturing & Sales
Website	http://www.latexx.com.my/

My Analysis

Forecast P/E now	(2.59-0.075)/0.289 = 8.70 (Moderate)
Target Price	2.89+0.075 = 2.96 (PE 10.0, EPS 0.289, DPS 0.075)
Decision	BUY
Comment	Revenue and profit slow down but still higher than preceding year corresponding quarter, good cash flow, better liquidity ratio but still consider low, better gearing ratio but still above moderate, better working capital, receivables collection period is acceptable, latex price increasing, USD against MYR strengthening
First Support Price	2.4
Second Support Price	2.0
Risk Rating	MODERATE

Research House

MIMB Target Price

2.76 (2010-11-11)

Accounting Ratio

Return on Equity	38.23%
Dividend Yield	1.93%
Profit Margin	15.53%
Tax Rate	12.61%
Asset Turnover	1.2342
Net Asset Value Per Share	0.92
Net Tangible Asset per share	0.84
Price/Net Tangible Asset Per Share	3.31
Cash Per Share	0.21
Liquidity Current Ratio	1.6103
Liquidity Quick Ratio	1.1674
Liquidity Cash Ratio	0.5103
Gearing Debt to Equity Ratio	0.7092
Gearing Debt to Asset Ratio	0.4149
Average working capital per thousand Ringgit sale	13.2%
Average days to sell the inventory	37
Average days to collect the receivables	41

My notes based on 2010 quarter 3 report (number in '000):-
- The Group recorded a 60.7% growth revenue for 3Q10 from the same quarter a year ago. For the current quarter the Group achieved an increase of 41.3% profit before tax from the same quarter last year. Profit after tax recorded an increase of 23.5% from the same quarter last year

- For the current year to date, the Group’s revenue increased 73.1% from the corresponding period last year. Profit before tax and profit after tax comparing to the same period last year has increased by 93.9% and 72.0% respectively

- The increase in the Group’s revenue and improvement in the net profit of the current year was mainly due to the increase in overall sales volume, driven by the strong demand of gloves and the Group’s expanded capacity from 4.5 billion pieces per annum to 7.0 billion pieces per annum. The stronger performance was also attributed by measures taken to improve the effectiveness and efficiency in operation control; as well as intensified and aggressive marketing strategy

- For the current quarter, the Group’s revenue registered was 3.4% lower compare with the preceding quarter. Profit before tax was 16.4% lower compared to the preceding quarter, and profit after tax was 18.2% lower compared to the preceding quarter. The decline in the Group’s revenue and profit were principally due to the persistently high latex prices and weakening of US dollar that affected the Group’s profit margin

- The Group has started offering a range of thinner, good quality and more price competitive nitrile gloves

- Currently, almost 90% of the Group’s sales is to the medical sector

- Launching of the first-in-the world NR powder-free gloves with unquantifiable protein level

- Estimate next 4Q eps after 2010 Q3 result announced = 0.3043*0.95 = 0.289, estimate PE on current price 2.59 = 8.7(DPS 0.075)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.0824*4 = 0.3296+0.012(QbQ improvement adjustment) = 0.3416, estimate highest/lowest PE = 10.47/6.72 (DPS 0.075)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.0792*4 = 0.3168+0.02(QbQ improvement adjustment) = 0.3368, estimate highest/lowest PE = 11.46/9.62 (DPS 0.05)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.0675*4 = 0.27+0.02(QbQ improvement adjustment) = 0.29, estimate highest/lowest PE = 14.62/12.14 (DPS 0.02)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.0566*4 = 0.2264, estimate highest/lowest PE = 21.78/10.42 (DPS 0.02)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.0586*4 = 0.2344, estimate highest/lowest PE = 11.99/7.81 (DPS 0.02)
- Estimate next 4Q eps after 2009 Q1 result announced = 0.047*4 = 0.188, estimate highest/lowest PE = 10.37/4.2 (DPS 0.02)

LATEXX latest news (English)

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USD/MYR Chart

Daily Latex Price

Financial Quarter Summary

a_date	year	qrt	h_price	l_price	div	roe	c_roe	rev	c_rev	pbt	c_pbt	prof	c_prof	eps	c_eps	asset	liab	mino	equi	cfo	cfi	cff	cash	fcf	net	final	share	c_share	m_cap	date	prof_m	vat	asset_t	pe	navps	ntaps	p/ntaps	cps	l_cur	l_qui	l_cash	g_de	g_da	avg_w	inv_d	rec_d
2010-11-10	2010	3	N/A	N/A	-	7.54%	25.61%	129878	390532	20168	67531	17625	59891	0.0679	0.2368	399765	165870	5	233895	55627	9915	10285	19187	45712	35427	54614	259706	252885	721982	2010-09-30	15.53%	12.61%	1.2342	-	0.92	0.84	3.31	0.21	1.6103	1.1674	0.5103	0.7092	0.4149	13.2%	37	41
2010-08-06	2010	2	3.65	2.37	0.025	9.83%	19.29%	134483	260654	24115	47363	21551	42266	0.0824	0.1632	392854	173699	5	219155	42505	5056	9037	19187	37449	28412	47599	261575	259007	939054	2010-06-30	17.93%	10.63%	1.131	-	0.85	0.77	4.66	0.18	1.5287	1.0966	0.4154	0.7926	0.4421	13.6%	42	48
2010-05-03	2010	1	3.91	3.29	0.025	10.68%	10.68%	126171	126171	23248	23248	20715	20715	0.0792	0.0792	357530	163606	5	193924	17081	742	4588	19187	17823	13235	32422	261593	261593	1007133	2010-03-31	18.43%	10.90%	1.0748	-	0.74	0.66	5.83	0.12	1.3847	0.979	0.2897	0.8437	0.4576	11.2%	44	55
2010-02-05	2009	4	4.25	3.53	-	10.18%	30.69%	102843	328430	17390	52223	17275	52102	0.0675	0.2129	331170	161419	0	169751	47202	22908	2062	7884	24294	26356	34240	256039	244718	965267	2009-12-31	16.91%	0.66%	0.9917	17.7073	0.69	0.61	6.18	0.07	1.052	0.7045	0.1736	0.9509	0.4874	1.8%	50	57
2009-11-02	2009	3	4.95	2.38	0.01	9.29%	22.66%	80839	225587	14276	34832	14274	34827	0.0566	0.1439	297830	144137	0	153693	19877	10272	1013	26962	9605	8592	35554	252026	241959	667868	2009-09-30	17.66%	0.01%	0.992	-	0.64	0.55	4.82	0.14	1.1305	0.774	0.3598	0.9378	0.484	4.4%	54	60
2009-07-31	2009	2	2.82	1.84	-	8.18%	14.74%	74427	144748	11412	20556	11410	20554	0.0586	0.1056	265696	126276	0	139420	20569	6779	5288	7884	13790	19078	26962	194697	194697	371871	2009-06-30	15.33%	0.02%	1.0435	-	0.72	0.61	3.13	0.14	1.144	0.7679	0.3089	0.9057	0.4753	4.5%	51	54
2009-05-06	2009	1	1.96	0.8	0.01	7.04%	7.04%	70321	70321	9145	9145	9143	9143	0.0470	0.0470	246041	116085	0	129956	8181	716	3682	7884	8897	12579	20463	194697	194697	182041	2009-03-31	13.00%	0.02%	0.999	-	0.67	0.56	1.67	0.11	1.1173	0.7385	0.2529	0.8933	0.4718	3.9%	50	59
2009-02-16	2008	4	0.935	0.515	-	5.56%	12.57%	69860	223255	6719	15199	6717	15191	0.0345	0.0780	236232	115419	0	120813	797	22812	28621	2872	23609	5012	7884	194697	194697	114871	2008-12-31	9.62%	0.03%	0.9451	7.5618	0.62	0.52	1.13	0.05	1.0662	0.6401	0.1181	0.9554	0.4886	2.5%	57	65
2008-11-17	2008	3	0.615	0.375	-	5.44%	7.43%	62652	153395	6201	8481	6199	8476	0.0318	0.0435	228110	114093	0	114017	16859	18796	42096	2872	35655	6441	9313	194697	194697	91507	2008-09-30	9.90%	0.03%	0.889	-	0.59	0.48	0.98	0.05	1.0802	0.679	0.0968	1.0007	0.5002	3.8%	65	76
2008-08-28	2008	2	0.515	0.285	-	1.06%	2.11%	42950	90743	1144	2278	1142	2276	0.0059	0.0117	191413	83486	112	107927	8683	5887	15958	618	14570	1388	2006	194697	194697	58409	2008-06-30	2.66%	0.17%	0.9303	-	0.55	0.45	0.67	0.01	1.2068	0.6889	0.0309	0.7743	0.4362	7.5%	68	66
2008-05-26	2008	1	0.39	0.26	-	1.06%	1.06%	47793	47793	1134	1134	1132	1132	0.0058	0.0058	179513	72727	112	106786	10352	3139	11237	2872	13491	2254	618	194697	194697	76905	2008-03-31	2.37%	0.18%	0.8929	-	0.55	0.44	0.9	N/A	1.1877	0.6866	0.0105	0.6818	0.4051	6.9%	69	73
2008-02-25	2007	4	0.495	0.34	-	1.04%	4.59%	49397	150768	1090	4867	1100	4854	0.0076	0.0334	174360	68707	112	105653	1623	12459	16867	3159	10836	6031	2872	145299	145299	66111	2007-12-31	2.21%	-	0.8647	13.6199	0.73	0.59	0.77	0.02	1.1713	0.6797	0.0507	0.651	0.3941	6.4%	68	76
2007-11-24	2007	3	0.84	0.445	-	1.80%	3.83%	37935	101371	1889	4025	1884	4017	0.0130	0.0277	154276	49499	112	104777	3912	8891	16917	3159	12803	4114	955	144923	144923	100721	2007-09-30	4.98%	0.11%	0.8844	-	0.72	0.58	1.2	0.01	1.219	0.6242	0.02	0.4729	0.3208	N/A	N/A	N/A
2007-08-28	2007	2	0.815	0.655	-	0.81%	2.05%	25170	63436	845	2136	843	2133	0.0058	0.0147	144474	40613	109	103861	3869	2459	13958	3159	6328	7630	4471	145298	145298	N/A	2007-06-30	3.36%	0.24%	0.6818	-	0.71	0.57	N/A	0.03	1.3851	0.6657	0.1151	0.3914	0.2811	N/A	N/A	N/A
2007-05-30	2007	1	N/A	N/A	-	2.77%	2.77%	38266	38266	1291	1291	1290	1290	0.0157	0.0157	143323	96833	109	46490	1620	1808	164	3159	188	24	3183	82331	82331	43223	2007-03-31	3.37%	0.08%	0.5117	-	0.56	0.32	1.64	0.02	0.5527	0.2758	0.0147	2.0878	0.6756	N/A	N/A	N/A
2007-02-28	2006	4	N/A	N/A	-	0.18%	8.71%	35073	141010	71	3926	80	3936	0.0010	0.0478	142455	97252	109	45203	8504	3905	2034	5724	4599	2565	3159	82331	82331	50221	2006-12-31	0.20%	-	0.2462	12.7596	0.55	0.3	2.03	0.02	0.5481	0.301	0.0149	2.1567	0.6827	N/A	N/A	N/A

Financial Quarter Balance Sheet

year	qrt	Goodwill on consolidation (A-0)	Other investments (A-0)	Prepaid lease payments (A-0)	Property, plant and equipment (A-0)	Cash and cash equivalents (A-1)	Current asset classified as held for sales (A-1)	Current tax assets (A-1)	Inventories (A-1)	Other receivables, deposits and prepayments (A-1)	Trade receivables (A-1)	Deferred tax liabilities (L-0)	Hire purchase liabilities (L-0)	Loans & borrowings (L-0)	Current portion of long-term borrowings (L-1)	Current tax liabilities (L-1)	Hire purchase liabilities (L-1)	Loans & borrowings (L-1)	Payables and accruals (L-1)	Trade and other payables (L-1)	Minority interest (M-1)
2010	3	20358	-	6106	200959	54614	-	92	47397	4418	65821	8856	31454	18536	3551	-	14300	18783	15538	54852	5
2010	2	20358	-	6126	191217	47599	-	87	49510	5114	72843	6345	32957	19823	3551	-	9221	19648	16224	65930	5
2010	1	20358	-	6145	176057	32422	-	87	45405	3992	73064	3814	26612	21261	3373	-	8462	24170	15107	60807	5
2009	4	20358	14856	6264	173399	19188	-	-	38417	2393	56295	1314	28857	20705	5221	5	8396	28920	15320	52681	-
2009	3	20358	-	6207	159541	35554	-	-	35229	2109	38832	863	21131	23314	3667	10	8546	29752	15812	41042	-
2009	2	20358	-	6225	139268	26962	-	-	32825	3812	36246	863	13100	25038	2930	11	5670	28384	13956	36324	-
2009	1	20358	-	6237	129044	20463	-	-	30643	2908	36388	943	11073	23155	5220	10	3298	25655	13744	32987	-
2008	4	20358	289	6294	118869	10018	243	-	36132	5637	38392	863	11749	17998	3401	10	3458	30213	13928	33799	-
2008	3	20358	-	6172	97682	9313	-	-	38591	23444	32550	943	12635	4328	5246	10	3402	31928	18628	36973	-
2008	2	20358	-	6159	86619	2006	-	-	33593	19165	23513	943	13091	4590	1024	10	3213	20722	16153	23740	112
2008	1	20358	-	6176	83339	618	-	-	29384	13612	26026	943	8075	5075	683	10	1921	10927	18897	26196	112
2007	4	20358	-	6114	81568	2872	-	-	27835	10316	25297	943	6071	5070	790	10	1371	2142	23284	29026	112
2007	3	20358	-	29183	46418	956	-	-	28455	9751	19155	990	111	557	386	-	83	4457	19091	23824	112
2007	2	20358	-	25952	44360	4471	-	-	27945	5370	16018	990	132	646	386	2	83	415	-	37959	109
2007	1	20358	-	-	70486	1399	-	-	26285	4607	20188	990	153	732	17351	2	83	30658	-	46864	109
2006	4	20358	-	25949	43852	1423	-	-	23579	3826	23468	990	-	847	17320	2	1	30645	23960	23487	109

Financial Quarter Income Statement

year	qrt	Revenue	Income tax expense	Cost of sales	Finance/interest costs	Other income/expenses	Administrative/Operating expenses	Minority interest	Finance/interest income	Selling and distribution costs
2010	3	129878	2543	-	1491	72	108291	-	-	-
2010	2	134483	2564	-	1408	29	108989	-	-	-
2010	1	126171	2533	-	1364	41	101600	-	-	-
2009	4	102843	115	-	1439	44	84058	-	-	-
2009	3	80839	2	-	1234	40	65369	-	-	-
2009	2	74427	2	-	1520	14	61509	-	-	-
2009	1	70321	2	-	2124	22	59074	-	-	-
2008	4	69860	2	-	1225	12	61928	-	-	-
2008	3	62652	2	-	855	10	55606	-	-	-
2008	2	42950	2	-	654	4	41156	-	-	-
2008	1	47793	2	43296	549	877	1180	-	10	767
2007	4	49397	10	44290	286	951	1760	0	15	1035
2007	3	37935	2	33821	140	761	420	3	10	914
2007	2	25170	2	22180	131	424	1355	-	11	508
2007	1	38266	1	33437	842	818	1157	-	3	724
2006	4	35073	9	28242	1280	2312	2487	-	1	682

Short form reference
a_date = announcement date, yr = financial year end, qrt = quarter
h_price = stock highest price during the quarter, l_price = stock lowest price during the quarter
div = dividend recommend or declare in the quarter, roe = return on equity
c_roe = cumulative of return on equity during the financial year
rev = revenue in the current quarter, c_rev = cumulative of revenue during the financial year
pbt = profit before tax in the current quarter, c_pbt = cumulative of profit before tax during the financial year
eps = earnings per share in the current quarter, c_eps = cumulative of earnings per share during the financial year
asset = total asset, liab = total liability, mino = minority interest, equi = total equity
cfo = net cash flow from operating activities, cfi = net cash flow from investing activities
cff = net cash flow from financing activities, cash = cash and cash equivalents as at beginning of financial year
final = cash and cash equivalents as at current financial period ended
share = diluted/basic weighted average number of ordinary shares
c_share = cumulative of diluted/basic weighted average number of ordinary shares during the financial year
m_cap = market capital at announcement date of quarterly report, date = current financial period ended date
prof_m = profit margin, vat = income tax rate, pe = price earning per share ratio of recent four quarter
navps = net asset value per share, ntaps = net tangible asset per share, cps = cash per share
l_cur = liquidity current ratio, l_qui = liquidity quick ratio, l_cash = liquidity cash ratio
g_de = gearing debt to equity ratio, g_da = gearing debt to assets ratio
avg_w = average working capital per thousand Ringgit sale
inv_d = average days to sell the inventory, rec_d = Average days to collect the receivables

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