Top Glove - Maybank Research 2022-12-15: Losses Deepen

Top Glove - Losses Deepen

  • Top Glove’s 1QFY23 results – net loss of RM168mil (+2.2x q-o-q; RM186mil net profit in 1QFY22) were below our/consensus estimates.
  • Near-term outlook remains challenging due to low utilisation rate of 30% (on effective capacity) no thanks to on-going inventory depletion activities at the customers’ end and stiff competition especially from the China counterparts.
  • - Read this at -

Hit by low plant utilisation rate

  • Including RM11mil inventory write down on unsold goods, Top Glove (SGX:BVA) reported a RM168mil net loss in 1QFY23 versus MIBG/consensus FY23E net profit of RM179mil/184mil.
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Key takeaways from concall with Top Glove's management

  • Top Glove is unable to raise its selling price due to the stiff competition amid an oversupply environment. To recap, it had intended to raise its ASP by +5% and to resume its pre-pandemic’s widely-used cost-plus pricing in Sep 2022,
  • Top Glove will prioritise cash flow over profitability for now. It has lowered its ASP (to below US$20/kpcs) to secure sales and raise plant utilisation rate,
  • ASP is stablising or declining at a slower pace in recent months,
  • Top Glove will focus on strengthening/optimising its cost structure and temporarily shut down old/inefficient factories, and
  • it does not discount the possibility to distribute its treasury shares as stock dividend.

Top Glove – Earnings adjustments

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Above is the excerpt from report by Maybank Research.
Clients of Maybank Securities may be the first to access the full report in PDF @

Wong Wei Sum CFA Maybank Research | 2022-12-15

Read also Maybank's most recent report:
2024-03-21 Top Glove - Remained In The Red; Looking To Breakeven By 4QFY24.

Previous report by Maybank:
2023-12-21 Top Glove - Positives More Than Priced In.

Price targets by 2 other brokers at Top Glove Target Prices.

Listing of research reports at Top Glove Analyst Reports.

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


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