Top Glove’s 3Q expected to benefit from unprecedented surge in demand for gloves

RHB Research has maintained its “buy” call on Top Glove Corp with a higher target price (TP) of RM 13.30 from RM 7.01 with 43 percent upside and 2 percent yield.

Top Glove’s 3QFY20 results is expected increase significantly as there’s the unprecedented surge in demand for gloves due to Covid-19.

“On the demand side, a worse-than-expected Covid-19 spread globally should lead to higher demand for gloves,” RHB said.

The research house also stated that due to the MCO, construction of new manufacturing plants have been slowed down. ASP rise is inevitable in such cases and should be across the board for all globes companies.

We expect 3QFY20 earnings to almost double QoQ, driven by four
positive factors: Higher ASP QoQ, strong volume growth QoQ, a better USD/RM, and lower raw material price,” it said in its trading notes today.

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