Top Glove slips below 90 sen, Supermax drops past 80 sen

Top Glove slips below 90 sen, Supermax drops past 80 sen

KUALA LUMPUR (Aug 12): Shares in major glove makers such as Top Glove Corp Bhd, Hartalega Holdings Bhd and Supermax Corp Bhd retreated on Friday (Aug 12), as the healthcare index of Bursa Malaysia slipped into the red.

Top Glove, the world’s largest glove producer, emerged as the most actively traded counter on the local bourse, with its share price dropping below 90 sen.

The stock opened unchanged at 92.5 sen before it started falling, going down to as low as 87.5 sen.

It then stood 4.5 sen or 4.86% lower at 88 sen, giving the company a market capitalisation of RM7.22 billion. The counter saw a total of 49.7 million shares changing hands as at the time of writing.

Meanwhile, Hartalega extended its loss and drifted further into negative territory, trading 18 sen or 7.89% lower at RM2.10, valuing the company at RM7.16 billion.

Supermax traded 2.5 sen or 3.07% lower at 79 sen, giving it a market capitalisation of RM2.15 million.

Kossan Rubber Industries Bhd was nine sen or 7.69% lower at RM1.08, valuing the company at RM2.76 billion.

The KL Healthcare Index, which tracks the performance of healthcare-related stocks, was down 36.9 points or 2.18% at 1,614.65.
RM30.92 billion wiped off in market cap since January

Since the beginning of the year, RM30.92 billion in market capitalisation has been wiped off across seven glove manufacturers on Bursa.

Top Glove — which has retreated 66.41% year-to-date — saw the biggest drop in market capitalisation, with RM13.77 billion evaporated since the beginning of the year.

This was followed by Hartalega, which saw a RM12.58 billion decline in market value, as its share price retreated by 64.22% year-to-date.

Meanwhile, from the height of the pandemic in December 2020, the seven glove counters collectively registered a fall of RM101.05 billion in their market capitalisation.

Top Glove lost RM42.13 billion in value since December 2020, while Hartalega's market value came down by RM34.61 billion.
Declining ASPs prompt analysts to slash target prices

On the earnings front, declining average selling prices (ASPs) of gloves, the increase in vaccination against Covid-19, and the opening of international borders and economic activities have taken their toll on the glove manufacturers.

On Wednesday, Hong Leong Investment Bank cautioned that Hartalega could be at risk of being removed from the FBM KLCI in the upcoming semi-annual review should its share price deteriorate further.

Hartalega recently announced that its net profit for the first quarter ended June 30, 2022 slumped to RM88.28 million, from RM2.26 billion a year earlier, as revenue dropped significantly at a time when ASPs and sales volume declined, after rising to record highs during the crucial period of the Covid-19 outbreak, which began in early 2020.

Quarterly revenue dropped to RM845.67 million, from RM3.9 billion a year earlier.

A check on Bloomberg showed that 15 analysts have "sell" calls on Top Glove, seven with "hold" calls, and one analyst with a "buy" call.

The target prices (TPs) for the world’s largest glove manufacturer range from 65 sen to RM3.30, giving it an average of RM1.83.

For Hartalega, 11 analysts have issued "sell" calls, followed by eight analysts with "hold" calls, and two with "buy" calls.

The average TP for Hartalega is RM2.19, with the highest set at RM5.80 and the lowest at RM1.86, based on data from Bloomberg.

http://www.theedgemarkets.com/article/top-glove-slips-below-90-sen-supermax-drops-past-80-sen