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 now and receive FREE sooka plan for 1 month.
T&C applies.

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

ABM welcomes GX Bank, Boost Bank as new members
Khee San to raise up to RM96.1mil from rights issue
Ringgit ends firmer against greenback amid heightened uncertainty as US election looms
Elridge Energy inks 15-year biomass fuel contract with Japanese trading firm
Bintai Kinden unit bags RM61.22mil construction job in Melaka
MCE, Chuhang ink MoU to develop automated driving radar
Bursa Malaysia ends higher lifted by plantation, construction stocks
Revenue to dispose of Innov8tif stake for RM40mil
MN Holdings' new job wins bring orderbook to all-time high of RM625.8mil
Bina Puri unit secures RM113.29mil contract for Sarawak water supply project

Others Also Read