Elevator Pitch
I downgrade my rating on Karex BHD (OTC:KRXBF) [KAREX:MK], the world's largest condom manufacturer, from "Bullish" to "Neutral". Karex was faced with multiple headwinds in recent years, such as weakness in the tender market, and higher-than-expected labor costs and volatile raw material costs. The company's net profit fell from a peak of RM66.7 million in FY2016 (YE June) to a low of RM2.5 million in FY2019, while its revenue growth slowed from a CAGR of +13.9% in the FY2010-FY2016 period to a CAGR of +3.3% in the FY2016-FY2019 period.
On the