Is AT (0072) AT SYSTEMATIZATION BHD really worth what it is, or much much more?

There has been a lot of hype recently on one particular new glove maker - AT Systematization Bhd... 

 

If you read through the comments section on AT, you will find that there are almost half of the comments are positive, and the other half super negative. Today, a couple of stock market gurus, including KYY and TYYap and co all visited the AT glove factory at Chemor - and here I picked out some of the positive pointers of this counter - and I shall share them here. 

 

• The glove production facility is in Chemor, Perak
• The raw materials are coming from a few different suppliers from Taiwan
• Next week will be the arrival of these glove materials
• The following week the factory will start testing and making gloves
• Full fledged production will commence in December 2020
• The Cost is USD 22 per 1,000 pcs 
• The estimated sales price is USD90/1000pcs, whereas spot orders at USD150+. 
• The company expects to be profitable in 2021, estimated earnings of RM 150-180 mil
• The production volume at full fledged and full swing with all lines will be about 2.6billion gloves per annum in April 2021
• All production, building, construction, land etc all paid for in cash, zero borrowings
• All employees are local, with about 240 staffs. 1,200 at peak.
• FDA certificate expected to receive in middle next year. 
• CE Certificate expected to be obtained in the next 1 month. 

The main difference between this company versus all the other new companies which shouted gloves and targetting and intending to go into gloves and healthcare, such as DGSB (I wrote about them 2 weeks ago), Salcon, Mah Sing, Vizione, GPA, Titijaya, Jerasia and so on and so forth... is that AT has a ready factory facility ready to produce gloves. 

 

Today, the closing price for the counter is RM 0.255... giving it a market capitalization of RM 830 mil. 

 

According to KYY - when AT's annual production reaches 2.6 bil annually, its projected PAT will be RM150 mil. WIth total issued shares of 3.25 bil, the earnings per share is 4.6 sen. With a PE of 15, its share price will be at 70 cent, giving it a market capitalization of RM 2.2-2.4bil. 

70 CENT??? I am not as optimistic. I am thinking perhaps 50 cent. But lets see if it breaks 30 cent next week or not. 

https://klse.i3investor.com/blogs/callmejholow/2020-11-13-story-h1536406332-Is_AT_really_worth_what_it_is_or_much_much_more.jsp