KUALA LUMPUR: AmInvestment Research is downgrading its call on the glove sector to “neutral” from “overweight” as at the current share price levels, the valuations for glove companies under its coverage – Top Glove Corp Bhd, Kossan Rubber Industries Bhd and Hartalega Holdings Bhd – have fully priced in the companies’ earnings outlook.
“We think that the average selling prices (ASPs) will begin to taper off in first quarter 2021 after the expected increase in ASP until end-2020, which have been priced in. Share prices of all of the glove companies in our coverage have exceeded their target prices, ” it said in a research note.