LATEXX have a good year

FY 31/12/09
Financial Result
For the 4Q ending 31/12/09, LATEXX revenue improve 27.3% to RM102.84m from RM80.8m recorded on preceding quarter. Net profit also increase 20.7% to RM17.3m. Year-on-year comparison saw group revenue jump 47.1% to RM328.43 million from RM223.25 million and profit before tax increased by 243.6% to RM52.22 million from RM15.20million respectively.Increase in revenue and net profit were mainly driven by recent capacity expansion and aggressive marketing strategy, overall cost savings also help.

Stock Valuation
With P/E 14.1X (EPS 26.7sen, closing 3.77) LATEXX is fairly attractive.

Technical Outlook
Short term price movement can be very much influence by oversea market. However, it is in a long term uptrend. Stochastic crossover and excited result should sparked some interest on this stock.

Future Prospect

• Installation of 8 double formers production lines was completed in Dec 09 and is in full operation.
• Construction of additional production plant is in progress, expected to start operation early 2010.
• Total capacity will increase to 9bil pieces per annum by 2011.
• JV with Budev BV to produce, market and distribute non proteins rubber glove. This is a new and potentially higher margin product.
• Target to increase nitrile glove output to more than 30% in 1Q10 due to strong demand.

Conclusion
Due to the better than expected 4Q09 result and more positive catalyst, I think Latexx has OVERWEIGHT the sector. It should be revalue with sector average of P/E 16x, come out with TP4.27.