KUALA LUMPUR (Nov 29): Supermax Corp Bhd shares fell 4.23% at mid-morning today, after the glove maker reported a 31% drop in first quarter net profit to RM24.75 million from RM35.94 million a year earlier.

At 11am, Supermax shares fell 6 sen to RM1.36 for a market capitalisation of RM1.85 billion.

The group's quarterly revenue, however, rose to RM369.94 million from RM367.05 million a year ago.

Supermax said its earnings were impacted by lower average selling prices (ASP) and an increase in production costs.

Meanwhile, CGS-CIMB Research maintained its "Add" rating on Supermax at RM1.42 with a lower target price (TP) of RM2 (from RM2.03) and said Supermax's 1QFY6/20 net profit of RM24.7 million (-15.9% year-on-year) was below expectations, at 18% of house and Bloomberg consensus' full-year estimates.

In a note Nov 28, the research house said the weaker-than-expected 1QFY20 results were due to stiffer pricing competition leading to ASP decline, and sharp rise in operating expenses.

"Maintain Add, with a lower TP of RM2.00 (18.8x CY21 P/E)," it said.