Stock Name: TOPGLOV
Company Name: TOP GLOVE CORPORATION BHD
Research House: MAYBANK
KUALA LUMPUR: Maybank Equities Research is retaining a Buy on Top Glove at a share price of Rm12.26 while the target price has been increased from RM11.30 to RM14.50.
It said on Monday, March 15 that it has raised the FY10-12 net profit and DPS forecasts by 7-10% and 40-50% respectively ahead of a stronger 2Q result. Top Glove has also raised core dividend payout to 40% (+10 percentage points) of net profits on strong free cash flow expectation.
"Our DCF (discounted cashflow) derived RM14.50 TP implies 14x PER on 2011 earnings. Buy," it said.
Maybank Research said the 2QFY10 results (due on March 17, Wednesday) are expected to be slightly better than 1Q's net profit of RM65m (+1-4% QoQ), which should lift 1HFY10 earnings to RM131 million to RM133 million. Annualised FY10 net profit should surpass the research house's earlier forecast and street estimates of RM240 million to RM244 million.
The sequential strength was attributable to improved earnings from 76%-owned Mediflex (listed on Singapore Exchange) and higher output from the new Plant 19 facilities. Elsewhere, average selling ASP grew 4-5% QoQ to compensate for rising latex prices (+30% QoQ).
Company Name: TOP GLOVE CORPORATION BHD
Research House: MAYBANK
KUALA LUMPUR: Maybank Equities Research is retaining a Buy on Top Glove at a share price of Rm12.26 while the target price has been increased from RM11.30 to RM14.50.
It said on Monday, March 15 that it has raised the FY10-12 net profit and DPS forecasts by 7-10% and 40-50% respectively ahead of a stronger 2Q result. Top Glove has also raised core dividend payout to 40% (+10 percentage points) of net profits on strong free cash flow expectation.
"Our DCF (discounted cashflow) derived RM14.50 TP implies 14x PER on 2011 earnings. Buy," it said.
Maybank Research said the 2QFY10 results (due on March 17, Wednesday) are expected to be slightly better than 1Q's net profit of RM65m (+1-4% QoQ), which should lift 1HFY10 earnings to RM131 million to RM133 million. Annualised FY10 net profit should surpass the research house's earlier forecast and street estimates of RM240 million to RM244 million.
The sequential strength was attributable to improved earnings from 76%-owned Mediflex (listed on Singapore Exchange) and higher output from the new Plant 19 facilities. Elsewhere, average selling ASP grew 4-5% QoQ to compensate for rising latex prices (+30% QoQ).
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