Adventa surges on CIMB upgrade

Adventa surges on CIMB upgrade

Tags: Adventa | CIMB | Top Glove | Upgrade

Written by Joseph Chin
Thursday, 12 November 2009 10:38

KUALA LUMPUR: Shares of Adventa surged in early trade on Thursday, Nov 12 after CIMB Equities Research initiated coverage on the glove maker with an Outperform and a target price of RM4.12.

At 10.25am, it was up 17 sen to RM2.12 with 1.58 million shares done.

The research house said the prognosis for the medical glove industry is favourable given rising healthcare needs and greater awareness of the need for hygiene, especially with the rising incidence of health scares.

"Adventa is in a great position to tap into this growth as well as the growth arising from ageing populations around the world and more demand for elective surgery," it said.

CIMB Research said due to the company's smaller size relative to its biggest rival Top Glove, it pegged it to a 30% discount to its target market price-to-earnings of 15 times.

"This gives us an end-CY10 target price of RM4.12, which implies share price upside of 111%. We begin our coverage with an OUTPERFORM recommendation, premised on the potential share price trigger of improving quarterly earnings driven by its surgical glove and OBM segment as well as its ongoing expansion," it said.

http://www.theedgemalaysia.com/business-news/153469-adventa-surges-on-cimb-upgrade.html


Comment:  What gives?  Perception.