The stock fell as much as 10.3% to 78 sen in morning trading. It pared some of its losses by day’s end, closing down 8.6% or 7.5 sen at 79.5 sen, valuing the group at RM2.16 billion.
Year to date, the counter has plunged almost 40%. Much of that drop occurred in the past month, having fallen 25% during the period.
For the company founded by executive chairman Stanley Thai and his wife, Cheryl Tan, it’s back to square one as its shares soared over 40% during November and December last year.
The surge was likely due to positive news flow on the impending opening of its glove manufacturing plant in the US, which was slated to start commercial production in January 2025. Since the start of the year, its shares have been trending down.
The company announced yesterday a net loss of RM4.92 million for the second quarter ended Dec 31, 2024 (Q2 FY2025) from RM44.36 million a year earlier.
The narrower loss was attributed to an increase in revenue on recovering global glove demand, forex gains of RM29.5 million, and cost rationalisation and automation efforts.
For the first half of FY2025, its net loss widened to RM69.55 million from RM46.41 million in the previous year’s corresponding period despite revenue rising 30.89% to RM423.44 million from RM323.52 million as global demand picked up.
However, Supermax said that global selling prices are still suppressed, especially with the influx of China-made gloves into the US prior to Jan 1, 2025, to circumvent the 50% tariffs imposed by the US government on Chinese products.
In view of the US tariff hike, it noted Chinese glove manufacturers deployed “aggressive pricing in non-US markets” such as Europe and South America for rapid market penetration.
However, it believes that in the long run, US tariffs on China-made gloves will benefit Malaysian glove makers by driving higher utilisation rates and average selling prices (ASPs) for Malaysian-made gloves.
US advantage
With its plant in Houston, Texas, commencing production last month, Supermax expects the factory to contribute to the group’s revenue in the second half of 2025.
To be built over four phases by its wholly owned US subsidiary Maxter Healthcare Inc, it will have an annual production capacity of 19.2 billion pieces of gloves when fully completed.
The plant’s first phase, which entails capital expenditure of US$350 million (RM1.55 billion), will have a total production capacity of 4.8 billion pieces of nitrile gloves per annum.
Thai’s move for Supermax to set up its first manufacturing facility in the US is expected to give it an edge over its domestic and China-based competitors.
Meanwhile, TA Securities has downgraded Supermax to “hold” with a lower target price of 93 sen.
The research house cut its earnings estimates to a loss of RM85.1 million in FY2025 from a net profit of RM46.5 million initially. It is also estimating a loss of RM12 million in FY2026 and a profit of RM52.9 million in FY2027.
Moving into the first half of 2025, the glove industry continues to face headwinds from Chinese glove makers, it noted.
“We expect sales volumes to decrease in the first half as US customers have raised their inventories ahead of the tariff implementation in January,” it said in a note today.
Thai started Supermax with his wife in 1987 as a distributor of latex gloves and began manufacturing gloves in 1989. The company produces over 24 billion gloves a year and exports to 165 countries.
Thai, 65, and Tan, 64, are currently undergoing divorce proceedings, according to news reports.