Hong Leong sets ‘buy’ call on Top Glove

February 1, 2018

glovesHong Leong Investment Bank has set a ‘buy’ call on Top Glove Corporation Bhd due to its upside potential upon the completion of its acquisition of Aspion Sdn Bhd, which would transform the rubber glove manufacturer into the world’s largest surgical glove player by capacity.

In November 2017, Top Glove announced its plan to buy surgical glove maker Aspion for about RM1.3 billion, which it believed would boost the group’s profits by a fifth in the financial year ending Aug 31, 2018 and accelerate the group’s expansion into the highly lucrative segment of the market.

As of 11.08 am, Top Glove shares jumped 40 sen to RM9.55, with 2.5 million shares transacted.

“On the rubber sector’s outlook, we are maintaining our ‘neutral’ stance for 2018 due to the historical high sector valuation against the backdrop of the strengthening ringgit,” Hong Leong Investment said.

It said exports account for more than 90 % of revenues denominated in the US dollar, while a substantial portion of the cost base denominated in ringgit, and a stronger ringgit would affect revenue upon translation into the home currency.

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(Last Updated: 18 Feb 2019)

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