Top Glove - CGS-CIMB Research 2022-03-09: Multiple Headwinds Still Ahead

Top Glove - Multiple Headwinds Still Ahead

  • Top Glove (SGX:BVA)'s 1HFY22F (Sep 2021 to Feb 2022) core net profit of RM272m (-95% y-o-y) was below expectations, due to lower-than-expected ASPs and surge in operational costs.
  • While ASPs may have bottomed in 3QFY22, we expect multiple headwinds in terms of higher raw material costs and increase in operating expenses.
  • Top Glove's dual-listing plans on HKEX is on hold. We are positive given the EPS-dilutive nature of the listing
  • We cut our FY22-24F EPS estimates to account for higher raw material prices and operating costs. We reiterate REDUCE call on Top Glove with a lower target price of RM1.30 (20x CY23F P/E, in line with its current 5-year mean P/E). In our view, the worst is not yet over for Top Glove as we believe that its current valuations (a 21.4% premium to its 5-year mean) have yet to account downside to its earnings, while the operating environment remains weak.

Above is the excerpt from research report by CGS-CIMB.
Clients of CGS-CIMB may access the full report in PDF @

Walter AW CGS-CIMB Research | 2022-03-09
SGX Stock Analyst Report REDUCE MAINTAIN REDUCE 0.42 DOWN 0.490

Read also CGS-CIMB's most recent report:
2022-09-20 Top Glove - Tough Times Remain Ahead

Target prices by 3 other brokers at Top Glove Target Prices.
Listing of broker reports at Top Glove Analyst Report.

Relevant links:
Top Glove Share Price History,
Top Glove Announcements,
Top Glove Dividends & Corp Actions,
Top Glove News Articles


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