Harga Getah affects glove makers...

lucky me...made a decision to cut loss on topglove a few days ago...foresee a further downside of gloves...

td sembang dgn a friend of mine...he owned some small rubber estate...3 hari dpt rm3,000...dan price getah about rm7.15 p/kg...a month ago, bru rm6.30....wow! getah estate owner are laughing to the bank...

again trend ni akn meningkat selagi general election blum jalan...which means...if GE (PRU) mgkn dlm april atau may....bru getah akn stabilise...but d question is...bilanya harga getah akan turun....until that happens, i do not dare to enter....if buy gloves...maybe need to hold until next year utk comeback....if impatient enuf to enter...then do it bit by bit....either way is too risky...no guarantee bcos rubber price bites off a big chunck of gloves' profit....

FYE2011 utk gloves, will likely see...a HUGE reduction in...
1. revenue
2 profit margin
3. eps

but in contrast...a BALLOONING influx of trouble ahead in..
1. Cost (higher raw cost eg: rubber, fuel, forex exchange,transport...)
2. Debt (of new financing of machinery/factory..)

This will spell disaster..unless...gloves company can do something to counter masalah di atas...such as:
1. buy rubber estates...with trees ready to be tapped (no point of buying vacant land, bcos takes time to grow rubber tree)...
2. pass the cost to the consumer...
3. using new material to replace rubber latex (aka synthetic gloves???)

Complicated isnt it?...and all the argument above just proves one thing....gloves are in deep sh*t...and will remain so for several financial quaters....

bottom line is...for gloves counter....u can look but do not touch...