Top Glove shares jump after surge in its ADR in the US

Last Friday, in the OTC market, its securities surged by US$3.05 or 68% to US$7.05

KUALA LUMPUR: Top Glove Corp shares jumped in early Monday, tracking the surge of the American Depositary Receipt (ADR) -- which are traded on the OTC exchange in the US -- last week.

At 9.19am, it was up 20 sen to RM4.92 with 15.68 million shares done.

The FBM KLCI was up 5.39 points or 0.34% to 1, 580.55. Turnover was 831.47 million shares valued at RM411.35mil. There were 299 gainers, 211 losers and 378 counters unchanged.

In Singapore this morning, its share price rose six cents or 3.85% to S$1.62.

Last Friday, in the OTC market, the ADR surged by US$3.05 or 68% to US$7.05

Last week the world’s largest glove maker reported a strong set of earnings on-year but there was a decline quarter-on-quarter.

Kenanga Investment Research said Top Glove’s profit after-tax of RM7262m (13-fold YoY) came in below expectations at 66%/69% of its/consensus full-year forecasts.

“The negative variance from our forecast is due to lower-than-expected volume sales and average selling price (ASP).

“Hence, we lower our FY21E/FY22E net profit by 15% each to account for lower ASP and volume growth, ” it said.

Kenanga Research said ASP trend is expected to soften albeit at a slower pace going forward as nitrile lead times have been reduced to between 90 to 120 days from 150 days previously.

“In our view, subsequent quarters of ASP weakness have already been reflected in the current share price. Reiterate OUTPERFORM with lower TP from RM6.49 to RM5.60 based on 12 times CY22 EPS, ” it said.

(Below are snap shots of its ADRs traded in the US last week - WSJ)

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