Top Glove (SGX:BVA)'s 2QFY24 core loss widened q-o-q to MYR65.7m, bringing 1HFY24 core losses to MYR123.6m, below our and Street’s expectations.
Top Glove’s weaker-than-expected results were on product mix changes (resulting in lower ASPs recognised) and escalating raw material prices. Still NEUTRAL with MYR0.93 target price, 8% upside from the current Top Glove's share price.
Top Glove's 2QFY24 results overview.
- Read this at SGinvestors.io -
During the quarter, sales volumes expanded 18% q-o-q, offset by lower ASPs (US$17/1k pieces vs 1QFY24’s US$20/1k pieces – a result of product mix changes). Plant utilisation rate improved to 40% vs 1QFY24’s 30-33%, resulting in positive EBITDA margins recorded for two consecutive quarters.
- Read this at SGinvestors.io -
ASP trends.
The sequentially lower ASPs were attributed to shifts in the product mix as volumes sold for light-weighted products exceeded sales of heavy-weighted ones.
Having said that, Top Glove intends to implement a 10% ASP hike to pass on the higher costs to customers – natural gas tariffs had increase 4% q-o-q starting March – by 3QFY24.
Outlook.
Read more at SGinvestors.io.
Above is an excerpt from a report by RHB Securities Research. Clients of RHB may be the first to access the full PDF report @ https://www.rhbtradesmart.com/.
Use Trust Referral Code PGKPSWAE to sign up NTUC Link or Trust Link Credit Card or open a Trust Bank savings account this December: ✨Earn up to S$1,000 cashback reward 🎟 and win an XPENG G6 SUV 🚙 !
