PETALING JAYA: Supermax Corp Bhd’s unit Maxter Glove Manufacturing Sdn Bhd’s move to abort its RM73.49mil land acquisition from S P Setia Bhd’s subsidiary, Bandar Setia Alam will not likely have a material impact on the group’s near-term earnings.

       For that reason, MIDF Research has maintained its earnings estimates on the glove maker. The aborted deal was initially intended for the construction of operations headquarters for Maxter Glove.

       The research house said the land acquisition plan fell through due to Supermax’s failure to obtain an approval from the Economic Planning Unit (EPU) to waive a 30% bumiputra equity ownership condition prior to transferring ownership of the land.

       On May 24, 2021, Maxter submitted an appeal to waive the EPU approval condition.This was rejected by the EPU on Dec 15, 2021.

       Following the termination of the land purchase, the group shared that total deposit refund including stamp duty has been duly received by Supermax on Jan 27, and the caveat on the land withdrawn effective Jan 31.

       MIDF Research in its latest report opined that “in line with its expansion plans, Supermax will still be keen to purchase land to support its operational needs and will examine other opportunities.”

       The research house maintained a “neutral call on the stock with a revised target price of RM1.20 from RM1.39 previously.

       “The broad-based risks still persist for the group such as the declining average selling prices, rising raw material prices and the shift in supply-demand dynamics due to increasing supply situation,” added MIDF Research.