CIMB Research retains Add for Top Glove, higher target price


KUALA LUMPUR: CIMB Equities Research is maintaining its Add and higher target price of RM10.80 for Top Glove Corporation.

It said on Friday the target price was still based on an unchanged 22.6 times CY19F price/earnings (P/E) – which is a 20% discount to its target P/E of 28 times for Hartalega

“We continue to like Top Glove for: i) being a key beneficiary of the strong demand for rubber gloves as the world’s largest glove producer, ii) margin expansion from increasing economies of scale, and iii) its growing manufacturing capabilities,” it said.

CIMB Research deemed Top Glove’s core net profit of RM210.1m for the first half ended Feb 28, 2018 to be above expectations, at 50.3% of its FY18F estimates. This is on the back of expectations of a stronger 2HFY18.

The 34.3% on-year growth in 1HFY18 core net profit was due to: i) increase in glove sales, ii) higher selling prices (ASPs), and iii) lower raw material prices, mainly latex.  

“Despite a weaker US$/ringgit, Top Glove should record sequentially-stronger earnings, with contributions from Aspion beginning 3QFY18 and global glove demand staying robust.  

“We raise our FY18-20F EPS by 5.7%-7.9% to account for: i) lower latex prices, ii) higher sales volume, and iii) increase in average selling prices,” said the research house.

 

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.
Follow us on our official WhatsApp channel for breaking news alerts and key updates!
   

Next In Business News

Lagenda Properties' unit secures contract worth up to RM99.6mil
Icon Offshore secures four key agreements to drive portfolio growth and expansion
RHB, CGC ink Malaysia’s first LCTF portfolio guarantee agreement, valued at RM400mil
Solarvest secures RM142mil solar EPCC contract in Kedah
Allianz Malaysia posts 7.4% lower earnings of RM183.17mil in 3Q
Tex Cycle eyes M&A, ESG market expansion
Ringgit retreats after three days of gains
Sarawak Plantation posts 14.5% profit jump in 3Q, declares 15 sen dividend
MAHB raises RM1.6bil in oversubscribed sukuk wakalah
MNRB appoints Rudy as interim president & CEO

Others Also Read