- Upgrade to BUY from Sell, new DCF-based Top Glove's target price at MYR1.06 (previously MYR1.10), 19% upside from the current Top Glove's share price.
- - Read this at SGinvestors.io -
Results overview.
- Top Glove (SGX:BVA) reported a 2QFY25 core profit of MYR23.3m, taking 1HFY25 core earnings to MYR1.4m (better than our expected MYR13m core loss) and largely due to improving ASPs.
- Realised ASPs spiked up by 3% q-o-q to US$19.90 on a better sales mix (increased contributions from higher ASP products) while sales volumes dipped 9% q-o-q to 9.4bn pieces – no thanks to frontloading by US customers.
- - Read this at SGinvestors.io -
- Plant utilisation declined 6ppts q-o-q to 58%.
Key takeaways from the results briefings.
- Top Glove's management guided that sales volumes hit trough in February, but are likely to resume the positive growth trend in March-May. Order enquiries for June from US customers picked up meaningfully, indicating signs of inventory restocking for the quarters ahead.
- Competition within the non-US market remains intense, as China ASPs of US$15 remain beyond unsustainable levels for Malaysian glove makers.
- Nonetheless, the net effect remains positive for local players, as the effect of losing out on non-US sales is set to be compensated by better ASPs in the US.
Outlook.
- Read more at SGinvestors.io.
