Industry Comparison – Gloves

Sector                 : Healthcare

Sub Sector         : Healthcare Equipment & Suppliers

As of 1 April 2020 there are 5 company listed in Bursa Main Market and ACE market which are doing business in manufacturing and trading of gloves. They are:

1) CAREPLS(0163) – CAREPLUS GROUP BERHAD

2) HARTA(5168) – HARTALEGA HOLDINGS BERHAD

3) KOSSAN(7153) – KOSSAN RUBBER INDUSTRIES BERHAD

4) SUPERMX(7106) – SUPERMAX CORPORATION BERHAD

5) TOPGLOV(7113) – TOP GLOVE CORPORATION BHD

Competitiveness

Marketshares is an importance indicator to determine the competiveness of the company. Total revenue make from manufacturing and trading of gloves for the year 2018 is RM 10,140,827917.

COMPANY	REVENUE (GLOVES) 2018 (RM)	MARKET SHARE (%)
CAREPLS (0163)	338,711,239	3.34
HARTA (5168)	2,405,638,106	23.72
KOSSAN (7153)	1,874,919,000	18.49
SUPERMX (7106)	1,300,817,572	12.83
TOPGLOV (7113)	4,220,742,000	41.62

TOPGLOV has the most market shares in gloves industry which is 41.62 % of the total gloves revenue in Malaysia for 2018.

Operational

For operational, operating income of the companies had been review. Operating income determine how much the companies’ revenue had turn into profit after reduction cost of operating expense .

Besides operating income, operating margin ratio is also calculated. Companies with higher operating margin ratio have more probability to survive in today financial crisis. The median operating margin ratio for this group of companies for 2018 is 13.29.

COMPANY	2018 OPERATING INCOME (RM)	2018 OPERATING MARGIN RATIO
CAREPLS (0163)	11,559,652	3.41
HARTA (5168)	534,352,573	22.21
KOSSAN (7153)	240,551,000	12,83
SUPERMX (7106)	228.920,600	17.60
TOPGLOV (7113)	559,572,000	13.26

HARTA has high operating margin ratio which is 22.21 compare to the others company in the industries the closet which can match with HARTA is SUPERMX  which has the operating margin ratio of 17.60.

The gloves giants TOPGLOV only had operating margin 13.26 despite having operating income almost similar to HARTA. This mean that TOP GLOV has high operating expenses.

Sustainability

For the sustainability of the business, debt of the companies is being review. There are two criteria to look at interest coverageratio , which is used to determine how easy the companies able to pay off the interest of outstanding debt and debt ratio. The median debt ratio for 2018 is 0.40.

COMPANY	2018 INTEREST COVERAGE RATIO	2018 DEBT RATIO
CAREPLS (0163)	2.11	0.53
HARTA (5168)	67.44	0.24
KOSSAN (7153)	12.33	0.38
SUPERMX (7106)	7.89	0.40
TOPGLOV (7113)	15.22	0.55

HARTA once again show is the best company for sustainability as it have the lowest debt ratio and high interest coverage ratio.

Summary

In summary a point is given to each company to evaluated each company competitiveness, operational and sustainability. Points given are as follows:

Competitiveness

Criteria	Point
Greater than 40 % Market Shares	5
30.01 % - 40.00 % Market shares	4
20.01 % - 30.00 % Market shares	3
10.01 % - 20.00 % Market shares	2
1.00 % - 10.00 % Market shares	1
Less than 1%	0

Operational

Criteria	Point
Greater than 20  Operating Margin	5
15.01 – 20.00 Operating Margin	4
10.01 – 15 Operating Margin	3
5.01 - 10.00 Operating Margin	2
1.01 - 5.00  Operating Margin	1
0.00 – 1.00 Operating Margin	0
Less than 0	Disqualified

Sustainability

Criteria	Point
No Financial Cost	2
Greater than 20 Interest Coverage Ratio	1
Less than 20 Interest Coverage Ratio	0

Criteria	Point
Less than 0.25	3
0.25 – 0.45	2
0.45 – 0.60	1
Greater than 0.60	0

COMPANY	Competitiveness	Operational	Sustainability	Total
CAREPLS (0163)	1	1	1	3
HARTA  (5168)	3	5	4	12
KOSSAN (7153)	2	3	2	7
SUPERMX (7106)	2	4	2	8
TOPGLOV (7113)	5	3	1	9

From the evaluation above, HARTA (12 points) is qualified for further analysis.

Summary of Stock Reviews

http://ivkls.blogspot.com/2020/04/industry-comparison-gloves.html