Stock Name: TOPGLOV
Company Name: TOP GLOVE CORPORATION BHD
Research House: RHB
KUALA LUMPUR: RHB Research Institute is maintaining its FY10-12 earnings for Top Glove Corp Bhd unchanged for now. It said on Wednesday, March 17 the fair value of RM15.50 and Outperform call on the stock remains unchanged. It said Top Glove's Medi-Flex (Not rated), reported 1HFY10 net profit of RM5.4 million (against a net loss of RM2.5 million in 1HFY09). "We believe the improvement in earnings was largely due to operating leverage effects on the back of higher utilisation rates, which more than offset the higher latex prices and weaker US$ against the ringgit," it said. On a half-on-half basis, revenue rose by 62.3% on the back of a higher average utilisation rate. Medi-Flex recorded an operating profit of RM6.6 million for the period (versus operating loss of RM1.7 million in 2HFY09). This improvement was on the back of: 1) operating leverage effects due to the higher utilisation rate; and 2) production of higher value products as powder-free latex and nitrile medical gloves have higher value than clean room gloves. Consequently, 1HFY10 net profit jumped to RM5.4 million as compared to a core net loss of RM2.1 million in 2HFY09. "Top Glove plans to add another eight new production lines at Medi-Flex's existing factory, F18. These new lines are interchangeable and can be used to produce clean room gloves, as well, which remains as Medi-Flex's main product line. Management remains optimistic that demand for clean room gloves would return as economic conditions continue to recover," it said.
Company Name: TOP GLOVE CORPORATION BHD
Research House: RHB
KUALA LUMPUR: RHB Research Institute is maintaining its FY10-12 earnings for Top Glove Corp Bhd unchanged for now. It said on Wednesday, March 17 the fair value of RM15.50 and Outperform call on the stock remains unchanged. It said Top Glove's Medi-Flex (Not rated), reported 1HFY10 net profit of RM5.4 million (against a net loss of RM2.5 million in 1HFY09). "We believe the improvement in earnings was largely due to operating leverage effects on the back of higher utilisation rates, which more than offset the higher latex prices and weaker US$ against the ringgit," it said. On a half-on-half basis, revenue rose by 62.3% on the back of a higher average utilisation rate. Medi-Flex recorded an operating profit of RM6.6 million for the period (versus operating loss of RM1.7 million in 2HFY09). This improvement was on the back of: 1) operating leverage effects due to the higher utilisation rate; and 2) production of higher value products as powder-free latex and nitrile medical gloves have higher value than clean room gloves. Consequently, 1HFY10 net profit jumped to RM5.4 million as compared to a core net loss of RM2.1 million in 2HFY09. "Top Glove plans to add another eight new production lines at Medi-Flex's existing factory, F18. These new lines are interchangeable and can be used to produce clean room gloves, as well, which remains as Medi-Flex's main product line. Management remains optimistic that demand for clean room gloves would return as economic conditions continue to recover," it said.
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