Top Glove 1Q net profit falls 3% on year to RM49m, revenue lower at RM568m

KUALA LUMPUR (Dec 16): Top Glove Corp Bhd reported a 3% drop in first quarter net profit from a year earlier as cheaper raw materials led to lower average selling prices (ASP) for its products.

Higher finance cost, and associate losses also curbed profit growth, Top Glove told the bourse today.
Top Glove said net profit fell to RM48.68 million in the first quarter ended November 30, 2014 (1QFY15) from RM50.28 million.

Revenue was lower at RM567.63 million compared to RM573.99 million, "largely owing to a lower ASP from decreasing raw material prices," Top Glove said.

"Intense competition in the nitrile glove segment also hampered cost past-through and resulted in weaker margins," Top Glove said.

Natural rubber, and synthetic rubber or nitrile are crucial raw materials for rubber glove production. Nitrile is derived from crude oil, prices of which, have fallen substantially.

Top Glove is expanding its nitrile glove production. The firm said the expansion included higher capacity at its factory in Lukut, Negeri Sembilan and another in Klang, Selangor.
According to Top Glove, the expansion will grow its total annual capacity to 44.6 billion pieces of gloves a year from 42.6 billion.

"The group expects the glove business environment to remain competitive and challenging.

"However, with better cost-discipline and cost-optimisation practices via continuous automation in place, coupled with an unwavering focus on quality across all aspects of its operations, the group is confident of navigating its way through this challenging time, to deliver an improved performance in the quarters ahead," Top Glove said.

KLCI opens higher, blue chips lead

KUALA LUMPUR (May 4): The FBM opened higher on Friday, lifted by gains at select blue chips.

The FBM KLCI rose 2.96 points to 1,586.13 at 9am.

Gainers led losers by 84 to 38 while 74 counters traded unchanged. Volume was 19.99 million shares valued at RM21.55 million.

Meanwhile, global stocks and crude oil fell on Thursday after data showing tepid growth in the U.S. services sector raised concerns about the economic recovery a day before a highly anticipated labor market report for April, according to Reuters.

Stocks turned lower, government debt pared losses and the U.S. dollar trimmed gains against the yen after the Institute for Supply Management said its services sector index fell to 53.5 in April from 56.0 the previous month, it said.

U.S. stocks fell on Thursday as economic data sent mixed signals on the recovery a day before the April payrolls report, while shares of Green Mountain plunged after poor results.

Slower-than-expected growth in the dominant U.S. services sector drove the day's trading. The retail sector dragged the market lower after several chains, including Target Corp and Gap Inc, fell after missing April sales estimates.

MIDF Research in a note Friday said bot its own and consensus FBM KLCI earnings growth for this year were expected to be at around mid-teens, i.e. 16.2% and 16.6% respectively, supported by (i) decent organic earnings growth performance, as well as (ii) absence of lumpy abnormal losses.

“Furthermore, we believe the current liquidity-driven rally has not yet ended despite recent difficulty of the KLCI to sustain itself above the 1,600 points levels,” it said.

The research house said that with the risk-on mood still prevailing on Wall Street, as attested by the main benchmark which is stealthily approaching its pre-2008 highs, it may eventually help the markets in this region to resume their upward momentum.

“Hence we expect to see further upside to the local market with an “encore rally” in the coming months.

“We reiterate both our year-high as well as year-end 2012 KLCI base case targets of 1,670 points and 1,600 points respectively,” it said.

On Bursa Malaysia, Aeon led the gainers and rose 40 sen to RM10.20, Petronas Dagangan and Top Glove gained 20 sen each to RM19.50 and RM4.70, Orient 12 sen to RM6.80, Petronas Chemicals 10 sen RM6.65, Genting eight sen to RM10.58, Lafarge Malayan Cement and MMC Corp up sen each to RM7.39 and RM2.78, and KLK six sen to RM23.78.



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CIMB Research maintains Neutral on rubber glove sector

KUALA LUMPUR (April 126): CIMB Research has maintained its Neutral rating on the rubber glove sector and said the expected implementation of a minimum wage policy by end-Apr would reduce its core EPS forecasts by 2.0-8.9% assuming a floor monthly wage of RM1,000.

In a note Thursday, CIMB Research said this was an opportunity for efficient glovemakers to gain share when smaller competitors fail.

“Our earnings estimates and target prices are unchanged as details are unknown. Key variables include the i) wage level, ii) treatment of foreign workers, iii) classification of ex-gratia payments and iv) timeline.

“We remain Neutral on the sector, with Hartalega being our top pick and Top Glove our top sell,” it said.



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Stocks to Watch Top Glove, SelProp, MAS, Globetronics, Keck Seng

KUALA LUMPUR (April 24): Malaysian stocks will take the cue from crucial global economic data from Europe and the US as investors assess external factors against domestic pre-election sentiment.

European highlights include the sale of government bonds in Spain and the Netherlands, while across the Atlantic the spotlight will be on indications of more quantitative easing (QE) by US policymakers to sustain the world's largest economy.

Analysts said signs of a further QE may spur global equities while an opposite indication could result in profit taking. In the US, the S&P 500 futures added 3.75 points to 1,366.5, while the Dow Jones Industrial Average futures climbed 30 points to 12,901.

In Malaysia, the FBM KLCI fell 1.52 points to close at 1582.28 points on Tuesday.

Stocks to watch on Wednesday are Top Glove Corp Bhd, Selangor PROPERTIES [] Bhd (SelProp), MALAYSIAN AIRLINE SYSTEM BHD [] (MAS), GLOBETRONICS TECHNOLOGY [] BHD [], and KECK SENG (M) BHD [].

Maybank Investment Bank Bhd has raised its earnings per share (EPS) forecast for Top Glove by 8% to 12% for financial years (FY) ending Aug 31, 2012 to 2014 after taking into account lower prices of natural rubber. Maybank IN, which revised upwards its fair value for Top Glove shares by 29% to RM5.40 from RM4.20, also upgraded the stock to a "buy" from "sell".

SelProp shares will trade ex-dividend on Wednesday. Shareholders have approved the company's plan to pay a first and final dividend of 10%, less 25% tax for the financial year ending Oct 31, 2011.

MAS gained as much as 3.3% or four sen to RM1.27 in intraday trade, against a backdrop of declining crude oil prices. Commodity prices fell on concerns that European sovereign debt woes will curb demand.

Globetronics's first quarter (1Q) net profit declined 4% from a year earlier, as the electronics component manufacturer registered lower revenue and higher operating cost. In a statement to the bourse, Globetronics said net profit came to RM6.2 million in the quarter to March 31, 2012, against RM6.43 million previously. Revenue fell 15% to RM56.79 million from RM67.09 million, as the company registered less turnover from China and Singapore, it said.

Keck Seng — which undertakes oil palm cultivation, besides real estate and hospitality operations — said it plans to reward shareholders with a final dividend of 6%, less 25% tax for financial year ended Dec 31, 2011. The proposed dividend requires shareholders' consent at the firm's coming annual general meeting.



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Top Glove advances on analysts’ upgrades

KUALA LUMPUR (April 24) : Top Glove Corp Bhd advanced as much as 2.3% after analysts raised their earnings forecast and target price for the world’s largest rubber glove manufacturer in terms of capacity.

The stock rose 10 sen to RM4.53 before settling lower at RM4.50 at lunch break. In a note, Maybank Investment Bank Bhd analyst Lee Yen Ling said the research house has raised its earnings per share (EPS) forecast for Top Glove by 8% to 12% for financial years (FY) ending August 31, 2012 to 2014 after taking into account lower prices of natural rubber.

“With majority of its sales in the latex segment (74% of total sales), a surplus-led lower latex cost will help Top Glove to at least sustain its margins. We lower our latex cost assumption by 7%, resulting in an 8% to 12% upward revision to our FY12-14 EPS forecasts,” Lee said.

Maybank which revised upwards its fair value for Top Glove shares by 29% to RM5.40 from RM4.20, also upgraded the stock to a “buy” from “sell”.



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Tenaga, blue chips lift KLCI

KUALA LUMPUR (April 12): The FBM KLCI closed higher on Thursday, lifted by gains at blue chips including Tenaga, Genting PLANTATION []s and Petronas Dagangan.

The FBM KLCI gained 4.10 points to close at 1,601.27.

Losers edged gainers by 366 to 360, while 321 counters traded unchanged. Volume was 1.11 billion shares valued at RM1.60 billion.

At the regional markets, most of the bourses reversed earlier losses as the Shanghai Composite Index rose more than 1.8%.

Meanwhile, Hong Kong shares rose on Thursday lifted by the rally in mainland markets on the back of reports of proposals to boost economic development in Shenzen as well as optimism of easier monetary policy following GDP data due later in the week, according to Reuters.

The euro neared a one-week high against the dollar and European bond markets steadied on Thursday as investors awaited an Italian debt sale that will show whether concerns over Spain are spreading to other debt-laden euro zone nations, it said.

At the regional markets, the Shanghai Composite Index rose 1.82% to 2,350.86, Hong Kong’s Hang Seng Index added 0.93% to 20,327.32,Japan’s Nikkei 225 gained 0.70% to 9.524.79, Taiwan’s Taiex edged up 0.08% to 7,662.92, whiel South Korea’s Kospi fell 0.39% to 1,986.63.

On Bursa Malaysia, Jaya Tiasa was the top gainer and rose 44 sen to RM8.99, SMPC up 34 sen to RM1.48, Tradewinds Plantations gained 19 sen to RM5.90, Cybertowers and Sarawak Oil Palms up 16 sen each to 75 sen and RM6.88, Genting Plantations and Brahims 15 sen each to RM9.67 and RM1.33, while Tenaga, Bat and United Plantations rose 14 sen each to RM6.51, RM54.84 and RM24.90 respectively.

Among the decliners, Warisan fell 30 sen to RM2.20, GAB down 22 sen to RM12.64, KLK 18 sen to RM24.32, BLD Plantations 16 sen to RM9.23, Panasonic, Manulife, Top Glove and LPI down 12 sen each to RM21.50, RM3.25, RM4.20 and RM13.80 respectively, RHB Capital fell 11 sen to RM7.36 and Shangri-La lost 10 sen to RM2.98.

The actives included JCY, Tiger Synergy, Asia Bio, Metronic, Ariantec and CSL.



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Matthews Intl ceases to be Top Glove substantial shareholder

KUALA LUMPUR (March 29): Matthews International Capital Management LLC has ceased to be a substantial shareholder of TOP GLOVE CORPORATION BHD [] after it disposed of 1.50 million shares on Wednesday.

Filings to Bursa Malaysia showed the US fund manager disposed of the shares in the open market, reducing its shareholding below the 5% level to be a substantial shareholder.

Matthews International had disposed of 47,100 shares on March 26 and 391,600 shares the next day. This saw the shareholding reduced to 31.127 million shares or 5.0316%.



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KLCI closes higher, but stays shy of 1,590-level

KUALA LUMPUR (March 27): the FBM KLCI recovered some lost ground and closed higher on Tuesday, in line with the overall improved sentiment at key regional markets.

However, the index stayed shy of breaching the 1,590-level for long.

The FBM KLCI was up 5.12 points to close at 15,88.10, lifted by gains at select blue chips. The index had earlier risen to its intra-day high of ,591.03.

Gainers led losers by 389 to 381, while 337 counters traded unchanged. Volume was 1.94 billion shares valued at RM1.66 billion.

Asian stocks rebounded, with Japan's Nikkei hitting a one-year high, and the dollar struggled on Tuesday after Federal Reserve Chairman Ben Bernanke said ultra-loose monetary policy was still needed to reduce unemployment, according to Reuters

Europe's major equity markets were also poised for gains, with Euro STOXX 50 index futures opening up 0.7 percent, while financial spreadbetters called London's FTSE to start trading 0.2-0.3 percent higher, it said.

At the regional markets, Hong Kong’s Hang Seng Index rose 1.69% to 21,017.13, Japan’s Nikkei 225 gained 2.36% to 10,255.15, South korea’s Kospi was up 1.02% to 2,039.76, Taiwan’s Taiex rose 0.78% to 8,029.46 and Singapore’s Straits Times Index…

On Bursa Malaysia, Dutch Lady was the top gainer and rose 60 sen to RM32, F&N added 24 sen to RM18.50, Petronas Dagangan added 22 sen to RM18.70, Malayan Flour Mills 21 sen to RM4.65 and KLK 20 sen to RM24.06.

Aeon Credit, Takaful and HLFG added 18 sen each to RM8.88, RM2.90 and RM12.30 respectively, while Petronas Gas and Genting PLANTATION []s gained 16 sen each to RM16.90 and RM9.41.

Metronic was the most actively traded counter with 280.1 million shares done. The counter gained four sen to 24.5 sen.

Other actives included Ariantec, Supercomnet, Naim Indah Corp, Focus, Frontken, Oversea Enterprise and TMS.

Among the decliners, Aeon fell 25 sen to RM9.15, Bintulu Port 17 sen to RM6.83, Allianz 12 sen to RM4.70, AirAsia 11 sen to RM3.35, Top Glove 10 sen to RM4.55. P.I.E., TDM, MISC and Sunway fell nine sen each to RM4.81, RM4.77, RM5.29 and RM2.62 respectively.



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Glove makers among top losers

KUALA LUMPUR (March 27): Glove makers Top Glove, Hartalega and Kossan were among the top losers in afternoon trade on Tuesday despite the overall firmer market.

At 2.46pm, the Top Glove was down 12 sen to RM4.53 with 350,900 shares done, Haratalega and Kossan lost seven sen each to RM8.02 and RM3.23. Supermax was unchanged at RM1.88.

The FBM KLCI was up 4.55 points to 1,587.53. Turnover was 1.18 billion shares done valued at RM802.06 million. There were 326 gainers, 342 losers and 344 counters unchanged.



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KLCI starts week on positive tone, select blue chips support

KUALA LUMPUR (March 19): The FBM KLCI started the week on a positive tone and closed slightly higher on Monday, lifted by gains of select blue chips including Petronas Gas, Tenaga and MISC.

The FBM KLCI closed 2.2 points up at 1,573.60. Turnover was 1.80 billion shares valued at RM1.51 billion. Declining stocks led advancers 434 to 319 while 329 counters were unchanged.

Asian shares edged higher and the dollar was steady against the yen on Monday after the U.S. market hit an almost four-year high last week and with higher European stocks reflecting signs of growing stability in the euro zone, according to Reuters.

The Shanghai Composite Index rose 0.23% to 2,410.18, Japan’s Nikkei 225 edged up 0.12% to 10,141.99, South Korea’s Kospi was up 0.62% to 2,0467.00. However, Hong Kong’s Hang Seng Index fell 0.92% to 21,121.67, and Taiwan’s Taiex shed 0.14% to 8,043.92 and Singapore’s Straits Times Index was down 0.68% to 2,990.09.

Ariantec Global was the most actively traded counter with 235.2 million shares done. The stock gained four sen to 13.5 sen.

Other actives included Metronic Global, Pan Malaysian Industries, Naim Indah Corp, IFCA MSC, Focus Point, Asia-Bio, Carotech and Hibiscus warrants.

Among the gainers were Dutch Lady, up 52 sen to RM30.50, Petronas Gas 40 sen to RM16.40, MISC 21 sen to RM5.36, HL Bank 18 sen to RM12 and Bumi Armada 16 sen to RM4.28.

Rock Chemical Industries rose 31 sen to RM2.06 or four sen below the RM2.10 takeover offer by Mega First Corp Bhd.

Bumi Armada added 16 sen to RM4.28. CIMB Equities Research raised the target price for Bumi Armada to RM4.80 from RM4.12.

It valued Bumi Armada at 18.2 times CY13 price-to-earnings, which is a 40% premium over its target market price range which was recently raised from 12.6 times to 13 times.

However, EPMB fell the most as investors were disappointed over its proposed acquisition of the 26km Maju Expressway (MEX) from Maju Holdings Sdn Bhd which was viewed as pricey.

Under the deal, the auto parts maker will pay RM1.7 billion for the highway concessionaire which included the debts. The MEX links the city centre in Jalan Tun Razak here to Putrajaya. OSK Research said the acquisition at RM1.7 billion would include assuming debts totaling RM550 million.

“Besides, the high interest cost will erode earnings in the immediate term. Given its excellent run but this pricey acquisition, we downgrade EPMB to a Neutral from a Buy, slashing its fair value from RM1.38 to RM1.15,” it said.

Other decliners were Cybertowers, down 14 sen to 31.5 sen, Top Glove 13 sen to RM4.83 while MAHB, Maybank and Mudajaya shed nine sen each to RM5.53, RM8.72 and RM3.01.



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Top Glove climbs on higher Q2 profit

At 9.59am trading Top Glove Corp, the world’s biggest rubber-glove maker, climbed 2.9 per cent to RM5.06, poised for the steepest advance since Jan 11. The company was upgraded to market perform, the equivalent of hold, from underperform, at Kenanga Investment Bank Bhd. Top Glove said yesterday its second-quarter profit more than doubled from a year earlier. -- Bloomberg



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Top Glove rises on firmer 2Q earnings

KUALA LUMPUR (March 15) : Top Glove Corp Bhd shares rose on Friday after its net profit in the second quarter ended Feb 29, 2012 (2QFY12) jumped 110% to RM53.46 million from RM25.41 million a year ago, as higher sales, and cheaper raw materials boosted the rubber glove manufacturer’s bottom line.

At 9.51am, Top Glove gained 10 sen to RM5.02 with 293,700 shares traded.

Top Glove on Thursday had said its revenue for the quarter in review rose 13% to RM548.99 million against RM485.21 million previously.

Cumulative first half net profit climbed 38% to RM84.89 million from RM61.46 million a year earlier, while revenue was up 12% to RM 1.1 billion from RM976.72 million.

However, CIMB Research in a note March 16 cautioned that investors should not get excited about Top Glove’s interims as the outperformance came from wider margins arising from a 21.5% quarter-on-quarter (q-o-q) fall in natural rubber (NR) prices.

“This is unsustainable as NR prices went up 15.4% q-o-q in 2Q. Switch to Hartalega, our top glove pick,” it said.

The research house said the strong 1H would not be repeated as NR prices are on the uptrend again.

“We believe that Top Glove’s strong performance resulted mainly from the clawback of costs from the 21.5% decline in NR prices during 1Q as NR is purchased on a lagged basis.

“NR prices were already up 15.4% q-o-q in 2Q, which we believe will crimp 3Q margins and earnings,” it said.



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CIMB raises fair value for Top Glove

KUALA LUMPUR (March 16) : CIMB Investment Bank Bhd has raised its fair value for Top Glove Corp Bhd shares from RM3.61 to RM3.63 but maintained its Underperform recommendation for the stock .

This follows CIMB’s 10.5% upward revision in its earnings per share forecast for Top Glove after the world’s largest rubber glove manufacturer in terms of capacity announced its second quarter financials, CIMB wrote in a note on Friday.

Top Glove’s net profit in the second quarter ended Feb 29, 2012 more than doubled (110%) to RM53.46 million from RM25.41 million a year earlier, as higher sales, and cheaper raw materials boosted the rubber glove manufacturer’s bottom line.

CIMB said Top Glove’s strong first half results “will not be repeated” as natural rubber prices are rising again. Shares of Top Glove rose 12 sen to close at RM4.92 on Thursday.



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Stocks to watch: Zelan, Selangor Dredging, Freight Management, Century Logistics

KUALA LUMPUR (March 16) : Global economic growth concerns may continue to weigh on Malaysian stocks on Friday as the local bourse sees less trading participation due to the on-going school holidays.

Analysts said a higher trading volume is crucial to sustain gains in the 30-stock FBM KLCI, against the backdrop of weaker economic sentiments in China which had pushed Asian bourses into the red.

“Higher volume is vital for more sustainable gains (in the KLCI),” Hong Leong Investment Bank Research wrote in a note.

According to Hong Leong Research, unless the FBM KLCI closes above the 1,580 and 1,585 levels and registers average daily trading volume of between 1.8 billion and 1.9 billion shares in the next few days, the research firm is reiterating its cautious view on the market.

On Thursday, the KLCI closed higher in late buying on Thursday, underpinned by gains in CIMB and Maybank amid volatile trading.

The KLCI rose 3.67 points or 0.2% to finish at 1,579.38. Turnover was 1.36 billion shares worth RM1.73 billion while the broader market was cautious, with 296 gainers versus 443 decliners while 367 stocks were unchanged.

Among the stocks to watch are ZELAN BHD [], SELANGOR DREDGING BHD [], Kinsteel Bhd, logistics firms Freight Management Holdings Bhd and CENTURY LOGISTICS HOLDINGS BHD [], besides Top Glove Corp Bhd, Taliworks Corp Bhd and Eversendai Corp Bhd.

Zelan’s 95%-owned Terminal Bersepadu Gombak Sdn Bhd (Tegas) has secured a 25 year and three months concession from the government for the Gombak Integrated Transport Terminal.

Tegas would undertake the RM307.37 million project on a build-lease-manage-operate-transfer basis via the public private partnership.

Selangor Dredging plans to launch a housing project with an estimated gross development value of RM150 million in Gombak.

It is buying three pieces of leasehold land measuring nearly 36,000 sq metres from Superior Dignity Sdn. Bhd for RM34.50 million.

Kinsteel is streamlining its downstream business operations, especially its 51% owned Perfect Channel Sdn Bhd, which has been affected by weak steel prices and rising material costs.

Kinsteel said on Thursday that Perfect Channel’s core activities were manufacturing and trading of steel beams, bars, wire rods and other steel products.

RHB Research Institute upgraded its recommendations for Freight Management and Century Logistics to Outoperform from Market Perform, and raised the fair values for both stocks. This is in anticipation that both logistics firms will benefit from a recovery in global trade.

Freight Management is deemed fairly valued at RM1.05 compared to the 92 sen estimated previously while Century Logistics has a potential reach RM2.09 compared to the previous target price of RM1.78, according to RHB Research.

Shares of both logistics firms closed unchanged on Thursday. Freight Management finished at 89.5sen while Century Logistics settled at RM1.78

Top Glove’s net profit in the second quarter ended Feb 29, 2012 (2QFY12) more than doubled (110%) to RM53.46 million from RM25.41 million a year earlier, as higher sales, and cheaper raw materials boosted the rubber glove manufacturer’s bottom line, the company told the exchange. Top Glove shares rose 12 sen to RM4.92.

Taliworks set up a joint venture with L.G.B. Engineering Sdn Bhd to construct water treatment facilities in Selangor. Taliworks closed 1.5 sen lower at 93.5 sen.

Eversendai executive chairman and managing director, Datuk A.K. Nathan expects the company to register an annual turnover of RM2 billion within the next five years. The company posted revenue of RM1.03 billion in financial year ended Dec 31, 2011. Eversendai shares declined one sen to RM1.67.



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KLCI closes higher in late push, buoyed by CIMB

KUALA LUMPUR (March 15): The FBM KLCI closed higher in late buying on Thursday, underpinned by gains in CIMB and Maybank amid volatile trading.

The KLCI rose 3.67 points or 0.2% to finish at 1,579.38. Turnover was 1.36 billion shares worth RM1.73 billion while the broader market was cautious, with 296 gainers versus 443 decliners while 367 stocks were unchanged.

Worries about the Chinese growth outlook limited gains in Asian markets. This saw the local equities paring gains during the day before recouping losses to finish higher. The KLCI reached an intraday high of 1,579.45at 9.26am before retreating to the day’s low of 1,574.59 at noon.

Among the key regional markets, Japan’s Nikkei 225 rose 0.72% to 10,123.28 and Hong Kong’s Hang Seng Index added 0.21% to 21,353.53.

South Korea’s Kospi slipped 0.06% to 2,043.76, Singapore’s Straits Times Index0.02% lower at 3,025.84 and Shanghai’s Composite Index 0.73% lower at 2,373.77.

Crude palm oil third-month futures rose RM24 to RM3.402, the highest since June 2011. US light crude oil added 32 cents to US$105.75 while Brent crude rose above US$125.

At Bursa Malaysia, CIMB rose 17 sen to RM7.57, pushing up the KLCI by 2.99 points while Maybank added six sen to RM8.67, nudging the index up by 1.06 points. RHB Capital rose eight sen to RM7.90.

YTL added seven sen to RM1.80, YTL Power four sen to RM1.81, Axiata three sen to RM5.15, Telekom two sen to RM5.15 and Maxis two sen also to RM5.96.

Aeon Credit added 38 sen to close at RM8.73, YHS 14 sen to RM2.60 while Top Glove’s strong earnings saw its share price climb 12 sen to RM4.92.

Among decliners, PETRONAS GAS BHD [] lost 38 sen to RM16.60 while NESTLE (M) BHD [] fell 30 sen to RM56.

Most active was Tiger Synergy Bhd which closed flat at 15 sen with some 104 million shares done.



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Flash: Top Glove 2Q net profit jumps 110% to RM53.4m

KUALA LUMPUR (March 15) : Top Glove Corp Bhd’s net profit in the second quarter ended Feb 29, 2012 (2QFY12) jumped 110% to RM53.46 million from RM25.41 million a year ago, as higher sales, and cheaper raw materials boosted the rubber glove manufacturer’s bottom line.

In a statement to the exchange on Thursday, Top Glove said its revenue for the quarter in review rose 13% to RM548.99 million against RM485.21 million previously.

Cumulative first half net profit climbed 38% to RM84.89 million from RM61.46 million a year earlier, while revenue was up 12% to RM 1.1 billion from RM976.72 million.

In a separate statement, Top Glove chairman Tan Sri Lim Wee Chai said a stronger US dollar versus the ringgit and lower latex prices had enabled the firm to register a higher net profit in 2QFY12.

“We have learnt from past experience on excessive increases in latex prices and shall remain cautious to continue with our planned strategy for a more balanced product mix of latex and nitrile gloves to cater to on-going customer preference.”

Top Glove shares rose three sen to RM4.83 at midday break on Thursday.



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MIDF raises TP for Top Glove, upgrades stock to Neutral

KUALA LUMPUR (March 15) : MIDF Amanah Investment Bank Bhd has raised its target price for Top Glove Corp Bhd shares by 22% to RM4.39 from RM3.61 and upgraded the stock to a Neutral.

In a note on Thursday, MIDF said it expects Top Glove’s earnings to improve in the current financial year against a backdrop of lower natural rubber prices and a weaker ringgit versus the US dollar.

“We expect 1HFY12 earnings to be in line with our forecast. We do not expect any dividend payment to be declared during this quarter. Even with the downward trending latex prices and the strengthening of the US dollar, we do not foresee demand for glove products to increase significantly in the near future.

“This is due to the supply glut in the industry and glove buyers are mostly satisfied with their current inventory levels,” MIDF said.

Top Glove is expected to announce o its financial results for 2QFY12 on Thursday. The stock rose five sen to close at RM4.80 on Wednesday.



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Stocks to watch: Top Glove, Meda Inc, SunREIT, DRB-Hicom

KUALA LUMPUR (March 15): The sell down across China equities could dictate sentiment on the Malaysian bourse on Thursday following updates that the world’s second largest economy will maintain efforts to curb real estate speculation.

China’s premier Wen Jiabao said on Wednesday that measures to curb property speculation must be maintained to prevent a real estate bubble which will be detrimental to the country’s economy.

Wen’s comments had reversed earlier gains across China stock markets, resulting in major indices finishing in the red.

Hong Kong’s Hang Seng closed down 0.15% to 21,307.8 points, while the Shanghai Composite declined 2.63% to 2391.23. The Shenzen Composite fell 4.09% to close at 969.12.

At Bursa Malaysia, the FBM KLCI rose 11.69 points or 0.7% to close at 1575.71.

Apart from macro factors, analysts, have in fact, warned of bearish technical dynamics in local equities, prompting the anticipation of a sell down in local stocks.

“Given the bearish short-term technical momentum, stocks are likely to drift lower on limited trading participation, as most investors would look for cheaper levels before they are prepared to nibble,” TA Securities Holdings Bhd.

Stocks to watch on Thursday include Top Glove Corp Bhd, Meda Inc Bhd, Sunway Real Estate Investment (SunREIT), DRB-HICOM BHD [], TRC SYNERGY BHD [], TELEKOM MALAYSIA BHD [] (TM) and Axiata Group Bhd.

Top Glove is expected to announce its financial results for the second quarter ended Feb 29, 2012 (2QFY12) on Thursday.

According to analyst reports, Top Glove has guided that its 2QFY12 results will be weaker than the preceding quarter’s numbers. Top Glove shares rose five sen to close at RM4.80 on Wednesday.

Meda Inc Bhd plans to undertake an integrated township in Sungai Siput, Perak with the proposed purchase of 256.04 acres of land from RM13 million. The company said its unit Nandex Land Sdn Bhd has signed a sale and purchase agreement with Majuperak Energy Resources Sdn. Bhd to purchase the leasehold land.

Sunway REIT Management Sdn Bhd has earmarked RM200 million as capital expenditure to transform Sunway Putra Place.

Sunway REIT Management, which is the manager for Sunway Real Estate Investment (SunREIT) said the preliminary capital expenditure (capex) for the refurbishment of the mall is estimated at RM200 million.

“The refurbishment exercise is expected to take about 15-18 months with a projected return on investment (ROI) of 12.5% to 15.0%,” it said.

DRB-Hicom has obtained shareholders consent to acquire a controlling 42.74% stake in national car manufacturer Proton HoldingsBhd. DRB-Hicom fell two sen to RM2.64

CONSTRUCTION [] firm TRC Synergy has secured a RM36 million job to undertake alteration works at the Dayabumi Complex. TRC shares closed unchanged at 75 sen.

ECM Libra Research has upgraded TM’s fair value by 29% from RM3.70 to RM4.78 but maintained its hold recommendation for the stock.

ECM Libra has also revised upwards its earnings forecast for TM by between 1% and 24% for the FY12 to FY14 period.

TM plans to roll out the second phase of its high speed broad band (HSBB) services in smaller industrial areas and state capitals where it is economically viable. TM shares rose seven sen to RM5.13.

Axiata Group’s Indonesian unit PT XL Axiata Tbk is expected to register a 10% growth in its subscriber base to 51 million this year from 46.4 million in 2011. Axiata rose six sen to RM5.12.



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Top Glove eyes acquisition this year

KUALA LUMPUR (March 8): Top Glove Corp Bhd, the world's largest rubber glove maker by volume, aims to buy at least one other glove producer this year as part of its strategy to gain market share and drive earnings, said its chairman and founder.

The Malaysian company is in talks with a number of rubber glove makers, chairman Lim Wee-Chai told Reuters in an interview.

"We are talking to companies mainly from Malaysia. When the pricing and everything is right, we can see something by the end of this year," he said at the company's headquarter in Klang just outside Kuala Lumpur.

Lim said Top Glove is well placed to make acquisitions on the back of its strong net cash position. The company held some 300 million Malaysian ringgit ($99.14 million) net cash as of Feb. 29, 2012, 16.7 percent higher than August a year earlier.

The global rubber glove industry, worth some $4.9 billion, has consolidated over the past decades, from 65 industry players controlling 45 percent of world market share in 2000 to 40 players commanding some 63 percent in 2012, according to the Malaysian Rubber Export Promotion Council.

Last year, private equity firm Navis Capital offered to buy Malaysian rubber glove maker LATEXX PARTNERS BHD [] for 852 million ringgit but the deal fell through due to disagreement on valuation.

YTY Group, the world's second-largest nitrile glove maker, followed up with a proposed 1.25 billion ringgit merger with Latexx but to no avail.

Top Glove is also working on deals to acquire rubber land in Malaysia, Indonesia and Cambodia as it tries to hedge against fluctuations in natural rubber prices, said Lim.

Profit margins for the industry declined in 2011 partly due to higher prices of latex, which makes up some 60 percent of rubber glove makers' production costs.

The latex price peaked at a record 11 ringgit per kg in early mid-February 2011. It plunged briefly in March last year after Japan's tsunami disaster, recovered, and then went on a gradual decline due to the dim global economic outlook.

The price is currently around seven to eight ringgit per kg now, where Lim expects it to stay this year.

"We foresee the global economic slowdown will ease commodity prices, but the Thai government's price support policy may boost prices in the short term," he said.

Top Glove plans to invest about 100 million ringgit this year to increase its production lines and factories, Lim said.

The company operates 20 manufacturing plants based in Malaysia, Thailand and China with a production capacity of 40.05 billion gloves annually. - Reuters



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Market dips in directionless trade, Greek bailout deal may support

KUALA LUMPUR (Feb 21): The Malaysian market slipped in directionless trade on Tuesday morning as investors stayed on the sidelines but the positive news that euro zone finance ministers sealed a second bailout for debt-laden Greece could provide some lift to sentiment.

At 12.30pm, the FBM KLCI fell 0.98 of a point to 1,559.59. Turnover was 913.22 million shares valued at RM649.72 million. Declining stocks beat advancers 431 to 236 while 342 stocks were unchanged.

All key regional markets were in the red. Japan’s Nikkei 225 fell 0.3% to 9,456.70, Hong Kong’s Hang Seng Index 0.47% to 21,323.90, Shanghai’s Composite Index 0.37% to 2,354.74, Taiwan’s Taiex 0.61% to 7,906.50, South Korea’s Kospi 0.75% to 2,009.66 and Singapore’s Straits Times Index 0.14% to 3,016.82.

Brent fell 6 cents to US$119.99 while US light crude oil rose US$1.59 to US$104.83. The ringgit was nearly unchanged against the US dollar at 3.0214. Crude palm oil futures fell RM4 to RM3,241 per tonne.

Reuters reported euro zone officials as saying that the finance ministers had nailed measures to cut Greece's debt to around 121% of gross domestic product by 2020, close to their original target of 120, after negotiators for private bondholders offered to accept a bigger loss to help plug the funding gap.

It reported that agreement on a 130-billion-euro rescue package with strict conditions attached will help draw a line under months of uncertainty that has shaken the currency bloc, and avert an imminent Greek bankruptcy.

At Bursa Malaysia, BAT was the top loser, down 94 sen to RM52.96 as it gave up most of Monday’s gains of RM1.38.

Esso fell 11 sen to RM3.65 after posting lower earnings. Nestle and Top Glove fell 10 sen each to RM55.90 and RM4.82.

Penny stock Widetec fell 25 sen to 41 sen but with only 2,000 shares done.

Naim Indah Corp was the most active with 67.43 million shares done, adding 2.5 sen to 50 sen.

PLANTATION []s were among the major gainers. United Plantations was the top gainer, rising 60 sen to RM23.36 after posating a strong set of results while BLD Plantations added 21 sen to RM10.04, Sarawak Plantations 14 sen to RM3.06.

Market expectations of bumper dividends from Maxis saw the share price crossing RM6, up 21 sen to RM6.02 in many months.



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