The Health September 2021 | Page 9

| Cover Story |

SEPTEMBER , 2021 | THE HEALTH

09

The Malaysian Rubber Glove Manufacturers Association ( MARGMA ) projects the rubber glove annual demand to grow to between 15 and 20 per cent with export revenue of RM34 billion in 2021 . The global market is set to hit 420 billion gloves .”
# Listed company
Tycoon
Value at peak
Value at Aug 17
Losses
( RM ’ mil )
( RM ’ mil )
( RM ’ mil )
1 Hartalega Holdings Kuan Kam Hon @ Kwan Kam Onn 31,331 11,190 -20,141 2 Top Glove Corporation Tan Sri Dr Lim Wee Chai 18,597 8,128 -10,469 3 Supermax Corporation Datuk Seri Stanley Thai Kim Sim 12,435 3,017 -9,418 4 Kossan Rubber Industries Tan Sri Lim Kuang Sia 9,379 3,796 -5,583 5 Rubberex Corporation Datuk Ong Choo Meng 1,357 248 -1,109 6 Careplus Group Lim Kwee Shyan 599 227 -372 7 Comfort Gloves Datuk Lau Eng Guang 521 291 -230
the first movement control order ( MCO 1.0 ).
Lucrative business
By July 2020 , last year , four months after the Covid-19 pandemic worsened worldwide , investors had poured more than RM60 billion into the top seven glove listed counters on Bursa Malaysia . They were Hartalega Holdings Berhad , Top Glove Corp Berhad , Kossan Rubber Industries Berhad , Supermax Corp Berhad , Careplus Group Berhad , Rubberex Corp ( M ) Berhad , and
Comfort Gloves Berhad .
Thus , the glove tycoons who owned substantial stakes in these companies witnessed an astounding increase in their wealth .
Even other listed companies have been jumping on the rubber glove bandwagon , branching out from their core businesses and into rubber-glove making . They are Luster Industries Berhad , a manufacturer of precision plastic parts , property developer Mah Sing Group Berhad , Salcon Berhad
* Value at peak ( value of shares held in Aug 2020 ) and Jiankun International Berhad among others .
But the bullish trend in share prices did not last as the prices of glove counters started to plunge following the rollout of vaccines globally towards the end of last year . Competition and a falling average selling price ( ASP ) made it worse . The tycoons too , who control these companies , have seen their wealth dive ( see table ).
According to Maybank Investment Bank Bhd ( Maybank IB ) analyst Wong Wei Sum , the glove sector is entering a declining ASP ( and hence profits ) trend on increased supply and rising vaccination rates . In addition , competition is intensifying among both existing and new entrants .
In a sector review in July , Maybank Kim Eng ’ s Head of Regional Equity Research Anand Pathmakanthan highlighted that the ASP was falling much faster than expected . Hence , glove makers ’ earnings outlook was much less bullish than six months ago .
On top of that , Anand pointed out that there is also a new significant global supplier of gloves emerging from China . This would have negative implications for the longer-term earnings growth and
world ’ s largest producers of nitrile rubber gloves . It owns 12 plants with an annual production capacity of 43 billion gloves .
Moving forward , Hartalega plans to build 16 new manufacturing facilities over the next 20 years and aims to increase annual production capacity to 95 billion gloves by 2027 .
Supermax Corporation Berhad
Founder and major shareholder Datuk Seri Stanley Thai Kim Sim
THANKS to the demand for rubber gloves due to the pandemic , Supermax Corporation founder and principal shareholder Datuk Seri Stanley Thai Kim Sim has emerged as a billionaire in Malaysia . With the 52-week high price of
RM11.01 / share in August last year
and his 21.98 per cent shares in the company he founded in 1987 , including the one-for-one bonus issue in August 2020 , Thai ’ s estimated net worth rose to RM12.43 billion in August last year .
During the same period , Supermax Corp ’ s bumper earnings for its Q1FY2021 ended Sept 30 came as revenue rose 265.6 per cent to RM1.35 billion from RM369.94 million a year ago while net profit soared 3,090 per cent to RM789.52 million ( Q1FY2020 : RM24.75 million ). The company attributed the outstanding profits to higher average selling prices for gloves and continuous robust demand .
However , just like the other gloves counters , Supermax Corp ’ s share price nosedived 72 per cent to RM3.07 / share on Aug 17 this year . Along with this , Thai lost 75 per cent of his wealth accumulated through his shares in Supermax during the peak period , losing RM9.42 billion to RM3.02 billion .
Meanwhile , in December , Thai and his wife Datin Seri Tan Bee Geok had transferred their shares in Supermax to Supermax Holdings Sdn Bhd , an
investment vehicle . Subsequently , Supermax Holdings is now the substantial shareholder of Supermax Corp . Both Thai and Tan are still the major shareholders of the glove maker .
Initially involved in distributing latex gloves , Supermax Corp had in 1989 ventured into manufacturing gloves .
It can produce 26 billion gloves per annum and has an expansion plan to increase its production capacity to 48 billion gloves annually by the end of 2022 .
Kossan Rubber Industries Berhad
Founder , Group Managing Director and CEO Tan Sri Lim Kuang Sia
WITH a one-for-one bonus issue in September 2020 and the escalating share price , Kossan Rubber Industries Group Managing Director and CEO Tan Sri Lim Kuang Sia saw RM9.38 billion added to his wealth with his 611 million shares in hand . The glove manufacturer ’ s share price hit a 52- week high of RM7.67 / share in August
last year .
Meanwhile , its net profit for the Q3FY2020 ended Sept 30 , 2020 , jumped 609 per cent to RM348.74 million from RM49.18 million in the previous corresponding quarter .
As for its Q4FY2020 , Kossan saw its net profit increase seven-fold to RM542.49 million from 61 million in Q4FY2019 . The good results were mainly due to higher sales volume and ASP of rubber gloves .
In its latest financial results Q2FY2021 ended June 30 , 2021 , the group reported a new record high quarterly profit of RM1.06 billion , expanded more than seven times from RM131.06 million in Q2FY2020 . The group attributed the surge in net profit mainly to its gloves division ’ s higher and higher demand .
The group is aware that the demand for gloves will eventually ease , and the