Koon Yew Yin 2 Oct 2020
In the last few days many people in my chat group asked for my opinion of Prolexus because its EPS for its latest quarter ending July jumped to 13.67 sen. But it has been losing money in the previous 2 quarters as shown on the table below.
I Google to find out more about the company so that I can give an honest opinion. The company produces a wide range of clothing from outerwear, tops and bottoms, children and adult wear. The company also specializes in producing clothing for Running, Training, Performance Sport, Gym and Yoga.
The company has been losing money because it cannot compete with other cheaper producers from Vietnam, Cambodia and China.
Face mask production
Recently due to Covid 19 pandemic there was a sudden surge in the demand for face masks and the company took advantage of the situation to produce face masks. As a result, the company could turn around from losing money to report profit. Many short-sighted investors are rushing to buy the share to push up the price.
Long term investors should know that it is very easy to make face mask. Moreover, face mask can be washed and reused. Soon there will be less demand for face masks and the company will not be able to make profit.
Everyone is entitled to his opinion. Only time will tell who is right and who is wrong. I am obliged to tell you that I do not have this share and whether you buy or sell will not affect me.
The picture below shows the type of clothing normally produced by the company.
