Here are the facts at hand. Please go through and make your own conclusions.
PS: If there is any error, please let me know.
Item #1: Macquarie report @ 26 August 2020
- Demand and ASP continue to rise
- No oversupply concerns in 2021
- Recommendation: OUTPERFORM with target price of RM30.40 (before bonus issue price)
Note: Underline and emphasis in red are mine.
Item #2: Macquarie's estimate for Top Glove's FY2021 profit is RM4.646 billion @ 23 July 2020
- Macquarie's estimated FY2021 profit for Top Glove: RM4.646 billion
Item #2: Macquarie report @ 9 September 2020 (i.e. 10 working days after Item #1)
- Title: Time to take off the gloves
- Bull case of RM20.40 vs base case of RM5.40 vs bear case of RM2.80 (i.e. variance of RM17.60 between bull and bear case!)
- Macquarie's estimated FY2021 profit for Top Glove: RM10.30 billion (increased by more than 2.2X from July 2020 report as per Item #2)
- Recommendation: Downgrade to Underperform with lower (-47%) target price of RM5.40 (i.e. RM16.20 before bonus issue)
Note: Underline, emphasis and star in red are mine.