KUCHING: Adventa Bhd’s (Adventa) financial year 2012 (FY12) net profit exceeded the market consensus on the back of higher shipments of Nitrile gloves coupled with lower latex prices as well as improved cost management, post privatisation.
To note, Adventa was listed in 2004 and is primarily involved in the medical glove manufacturing business.
However, the company announced the privatisation of its glove business in July 2012 and was classified as a PN17 company by Bursa Malaysia (Bursa) with its new core business focusing on providing healthcare services such as healthcare distribution and home dialysis treatment.
The research arm of Kenanga Investment Bank Bhd (Kenanga Research) said in a research report yesterday, “While revenue inched up only two per cent, Adventa reported a FY12 net profit which surged five-fold to RM25.5 million, beating the market consensus by 30 per cent.”
The research firm attributed Adventa’s stellar post privatisation results to its higher shipments of Nitrile examination gloves coupled with the lower latex prices as well as improved cost management which brought Adventa’s net earnings to RM2.1 million from a loss of RM1.3 million in the preceding year.
As to Adventa’s continued business operations after privatisation, Kenanga Research pointed out that Adventa’s shares have been actively traded after it announced the special payment of RM1.70 per share in July 2012.
“On January 4, 2013 as it went ex, the share price rallied to 85 per cent from its ex-price of RM0.23 per share to close at RM0.43, triggering an ‘Unusual Market Activity’ query by Bursa.
“The share price has been on a coaster ride with a high of RM0.53 and a low of RM0.30 since then, with an average daily trading volume of 18.3 million,” it added.
Kenanga Research further said the group’s current share price was currently at RM0.34 per share which was already above the research firm’s initial November 2012 fair value of RM0.27 per share.
As such, the research firm was optimistic on Adventa’s current performance given that its healthcare services business was still in its early stage, and there was a strong rise by 79 per cent in the group’s stock since November 2012.