Top Glove Q3 results below expectations


TUESDAY, JUNE 21 KUALA LUMPUR- Release of Bank Negara's foreign reserves as at 15 June 2016 at 1800 (1000 GMT) KUALA LUMPUR- Dewan Negara sitting at 1000 (0200 GMT) Top Glove Corp Bhd's(pic) media briefing on its third-quarter financial results at Shah Alam, Selangor at 1030 (0230 GMT)

PETALING JAYA: Maybank Investment Bank Research said Top Glove Corp Bhd’s third quarter financial results ended May 31 was “exceptionally weak” and below expectations on a convergence of negative factors.

The research house said it had lowered its “already street-low FY8/16-18 earnings per share forecasts further by  5% per annum on lower average selling price assumptions.

“Our new  target price is RM4.35 (-5%; unchanged 15x 2017 PER–mean valuations) and the stock is now a sell. As we expect Top Glove’s earnings to normalise ahead, we see downside risk to street’s earnings projections and hence, pressure on Top Glove’s share price,” Maybank said.

It said Top Glove’s third quarter  to May 31 net profit of RM63mil brought nine months net profit to RM295mil and made up 74% and 72% of the research house and street’s full-year forecasts.

“The results are below expectations as we do not expect earnings to significantly strengthen in fourth quarter. A first interim dividend per share of 6 sen was declared (versus 8 sen interim in FY8/15)–below expectations,” it added.

Maybank expects fourth quarter FY8/16 earnings to improve, but just slightly on lower latex cost, already down 13% from its recent peak in end-April 2016 due to seasonality and easing of nitrile competition. Top Glove raised its nitrile butadiene rubber (NBR) glove average selling price by around 5% in mid-May 2016.

Subscribe or renew your subscriptions to win prizes worth up to RM68,000!

Monthly Plan

RM13.90/month

Annual Plan

RM12.33/month

Billed as RM148.00/year

1 month

Free Trial

For new subscribers only


Cancel anytime. No ads. Auto-renewal. Unlimited access to the web and app. Personalised features. Members rewards.

   

Next In Business News

Trading ideas: IJM, RHB, MR DIY, Haily, Infomina, Radium, Key Asic, TMK, TopVision, KPJ, PetDag, KLCCP, SP Setia, IOI Prop, MPI
Oil falls more than US$2 a barrel on possible Middle East peace deal
Wall St closes higher; small-caps hit record high after Trump nominates Bessent
Chinese electric vehicle brands are spreading to Azerbaijan
Bond market halts run as buyers pounce on 4.5% yields
Murky 2025 for currently strong US dollar
BYD’s hybrid pickup targets Australia’s love of petrol-guzzlers
Dai Nippon says Elliott has sold most of its stake
What changing US AI policy means to S. Korea
NCCP 2.0 to have wide-ranging impact

Others Also Read