KUALA LUMPUR (Jan 12): Maybank Investment Bank Research is maintaining its Neutral outlook on the Malaysian glove makers industry.
It said on Thursday that though 2012 is a recovery year for the latex-focused players “but we believe overcapacity in latex powdered segment will limit the earnings recovery”.
Maybank Research pointed out that on the other hand, nitrile-focused players will see margin compression due to industry-wide expansion into nitrile segment, it said.
“Nonetheless, our top pick is Hartalega (TP RM6.80) due to the dichotomy between its high profitability and undeservingly low forward PER of only 9.0 times. We also have a Buy call on Kossan (TP: RM3.50) and Sell on Top Glove (TP: RM3.40),” said Maybank Research.
It said on Thursday that though 2012 is a recovery year for the latex-focused players “but we believe overcapacity in latex powdered segment will limit the earnings recovery”.
Maybank Research pointed out that on the other hand, nitrile-focused players will see margin compression due to industry-wide expansion into nitrile segment, it said.
“Nonetheless, our top pick is Hartalega (TP RM6.80) due to the dichotomy between its high profitability and undeservingly low forward PER of only 9.0 times. We also have a Buy call on Kossan (TP: RM3.50) and Sell on Top Glove (TP: RM3.40),” said Maybank Research.
