Top Glove targets 10% annual growth in net profit and revenue
Written by Daniel Khoo
Tuesday, 12 October 2010 11:46
KUALA LUMPUR: Top Glove Corp Bhd targets net profit and revenue to grow by 10%, says chairman Tan Sri Lim Wee Chai.
He said demand for latex gloves would continue to remain strong on the back of increased healthcare awareness and threats of diseases.
"We've had profit CAGR of more than 50% in the past two years but it is almost impossible to grow at that rate anymore," Lim said at a briefing for analysts and the media on Tuesday, Oct 12.
The company is on track to increase its annual capacity to 41.25 billion pieces of gloves from 33.75 billion pieces presently after its new factories are opened by August 2011.
http://www.theedgemalaysia.com/business-news/175136-top-glove-targets-10-annual-growth-in-net-profit-and-revenue.html
Showing posts with label topglove. Show all posts
Showing posts with label topglove. Show all posts
Friday 15 October 2010
Rubber gloves closer to the bottom, value emerging
| Rubber gloves closer to the bottom, value emerging |
Tuesday 5 October 2010
So, you like Glove Sector - Which Stock will you Pick?
Analysis of the Glove Sector.
https://spreadsheets.google.com/pub?key=0AuRRzs61sKqRdDM1ZFNXQ2ZPRHBYcFJjd1lDNFVYdFE&hl=en&output=html
The top 6 glove companies are priced at RM 8.7 billion in market capitalization. They generated a total of about RM 766 million in earnings the last 12 months.
https://spreadsheets.google.com/pub?key=0AuRRzs61sKqRdDM1ZFNXQ2ZPRHBYcFJjd1lDNFVYdFE&hl=en&output=html
The top 6 glove companies are priced at RM 8.7 billion in market capitalization. They generated a total of about RM 766 million in earnings the last 12 months.
Wednesday 23 June 2010
Top Glove’s topline growth offsets lower margin
Top Glove’s topline growth offsets lower margin
Tags: Brokers Call | MIDF Research | Top Glove Corp Bhd
Written by Financial Daily
Friday, 18 June 2010 10:30
Top Glove Corporation Bhd
(June 17, RM12.84)
Maintain trading buy at RM12.86 with lower target price of RM14.20 (from RM14.68): Strong glove sales momentum sustained with volumes increasing 25% year-on-year (y-o-y) or 1% quarter-on-quarter (q-o-q) in 3QFY10, supported especially by the emerging markets.
In tandem with latex price trends, average glove selling price was 30% y-o-y or 11% q-o-q higher to US$26 (RM84.76) per thousand pieces. Due to both factors and adverse impact on US currency depreciation, Top Glove’s revenue grew 49.4% y-o-y or 9% q-o-q to RM555.9 million.
Top Glove’s earnings before interest and tax (Ebit) margin declined to 15% in 3QFY10 from average of 18.6% in the past three quarters.
We believed that higher volatility in latex price and forex market signified the lag effect in passing on the costs. Noted also, production utilisation rate was lower to 75% from 2QFY10’s 80%.
We reckon the additional production capacity growth might be faster than the glove sales order. Nonetheless, y-o-y, EBIT margin was still at par with that in 3QFY09 despite average latex price surged 71.7% y-o-y while US currency depreciated by 9.5% y-o-y, reflecting company’s cost passing power remained intact.
A total of five new factories are targeted to be completed by FY11. All in, Top Glove’s total glove production capacity will increase by 8.25 billion pieces or about 25% to 33 billion.
To be on the conservative side, we are keeping our earnings forecast unchanged, reflecting the risk of lower margin due to potential excess production capacity, and higher energy and labour costs going forward.
After all, the government has planned to scrap subsidies on energy products gradually. Beyond 2015, we expect glove makers to face a more volatile cost environment as natural gas will be priced at market rate.
In addition, a higher levy may also be charged on foreign workers. On the mitigating side, glove demand could be stronger particularly from the developing countries. In addition, glove makers’ business model of passing on costs to the consumers is expected to be intact, and this will also cushion the downside.
First interim single-tier dividend of 14 sen per share was declared with ex-date and payable date on July 2 and July 23, 2010 respectively.
We continue to like Top Glove for its market leadership which commands about 22% of the global glove market share and its net cash position with good earnings quality.
Currently, Top Glove’s net cash is about 90 sen per share, the highest in the industry. Furthermore, there is no significant sign indicating glove demand slowing down.
We are rolling over our valuation into FY11 earnings, based on lower PER of 16 times (17 times previously) in order to factor in potential risks mentioned above. Consequently, we are revising marginally our target price downwards to RM14.20 (from RM14.68). — MIDF Research, June 17
This article appeared in The Edge Financial Daily, June 18, 2010.
Tags: Brokers Call | MIDF Research | Top Glove Corp Bhd
Written by Financial Daily
Friday, 18 June 2010 10:30
Top Glove Corporation Bhd
(June 17, RM12.84)
Maintain trading buy at RM12.86 with lower target price of RM14.20 (from RM14.68): Strong glove sales momentum sustained with volumes increasing 25% year-on-year (y-o-y) or 1% quarter-on-quarter (q-o-q) in 3QFY10, supported especially by the emerging markets.
In tandem with latex price trends, average glove selling price was 30% y-o-y or 11% q-o-q higher to US$26 (RM84.76) per thousand pieces. Due to both factors and adverse impact on US currency depreciation, Top Glove’s revenue grew 49.4% y-o-y or 9% q-o-q to RM555.9 million.
Top Glove’s earnings before interest and tax (Ebit) margin declined to 15% in 3QFY10 from average of 18.6% in the past three quarters.
We believed that higher volatility in latex price and forex market signified the lag effect in passing on the costs. Noted also, production utilisation rate was lower to 75% from 2QFY10’s 80%.
We reckon the additional production capacity growth might be faster than the glove sales order. Nonetheless, y-o-y, EBIT margin was still at par with that in 3QFY09 despite average latex price surged 71.7% y-o-y while US currency depreciated by 9.5% y-o-y, reflecting company’s cost passing power remained intact.
A total of five new factories are targeted to be completed by FY11. All in, Top Glove’s total glove production capacity will increase by 8.25 billion pieces or about 25% to 33 billion.
To be on the conservative side, we are keeping our earnings forecast unchanged, reflecting the risk of lower margin due to potential excess production capacity, and higher energy and labour costs going forward.
After all, the government has planned to scrap subsidies on energy products gradually. Beyond 2015, we expect glove makers to face a more volatile cost environment as natural gas will be priced at market rate.
In addition, a higher levy may also be charged on foreign workers. On the mitigating side, glove demand could be stronger particularly from the developing countries. In addition, glove makers’ business model of passing on costs to the consumers is expected to be intact, and this will also cushion the downside.
First interim single-tier dividend of 14 sen per share was declared with ex-date and payable date on July 2 and July 23, 2010 respectively.
We continue to like Top Glove for its market leadership which commands about 22% of the global glove market share and its net cash position with good earnings quality.
Currently, Top Glove’s net cash is about 90 sen per share, the highest in the industry. Furthermore, there is no significant sign indicating glove demand slowing down.
We are rolling over our valuation into FY11 earnings, based on lower PER of 16 times (17 times previously) in order to factor in potential risks mentioned above. Consequently, we are revising marginally our target price downwards to RM14.20 (from RM14.68). — MIDF Research, June 17
This article appeared in The Edge Financial Daily, June 18, 2010.
Wednesday 16 June 2010
Sunday 9 May 2010
Comparative analysis of Glove companies (9.5.2010)
Comparative analysis of Glove companies (9.5.2010)
http://spreadsheets.google.com/pub?key=thG2gqUrXjSrcpL3LAlPbRg&output=html
The whole sector has been re-priced since last year. The average PE for the sector is around 15.
Topglove trades at a slight premium. It is debt free and has net cash. It should continue to generate a lot of free cash flows in years to come.
Hartalega has done extremely well. It enjoys the biggest profit margin amongst the glove companies. This is due to its use of automation to increase productivity. It has overtaken the other more established companies and ranks 3rd in the earnings table.
Latexx has made a remarkable turnaround. It has good earnings and should continue to grow. Due to its smaller size, its growth is anticipated to be the fastest amongst all the glove companies.
Supermax is the most indebted of all the glove companies. Given the better glove business environment, perhaps, its management may surprise the investors in the next year or two. Meantime, its not as attractive as the above three companies in term of fundamentals.
Kossan has been disappointing. Kossan continues to carry a lot of debt despite having been a long player in the market when many other players have benefited from the strong revenue and margin growths to pare down their borrowings. Its profit margin is below the average of the industry.
Adventa gets good press. However, when comparing its fundamentals with its peers, it is not such an attractive stock. Its dividend payout is the highest in the industry compared to the industry average of nearer 20%. Moreover, its PE is the highest among the glove companies, but this does not appear to reflect its growth potential.
Rubberex is a disappointment and stood up quite apart from the fast moving players in this industry.
There are also significant risks in this industry, best summarised here:
Solid earnings growth as supplanted by
Key risks include
http://spreadsheets.google.com/pub?key=thG2gqUrXjSrcpL3LAlPbRg&output=html
The whole sector has been re-priced since last year. The average PE for the sector is around 15.
Topglove trades at a slight premium. It is debt free and has net cash. It should continue to generate a lot of free cash flows in years to come.
Hartalega has done extremely well. It enjoys the biggest profit margin amongst the glove companies. This is due to its use of automation to increase productivity. It has overtaken the other more established companies and ranks 3rd in the earnings table.
Latexx has made a remarkable turnaround. It has good earnings and should continue to grow. Due to its smaller size, its growth is anticipated to be the fastest amongst all the glove companies.
Supermax is the most indebted of all the glove companies. Given the better glove business environment, perhaps, its management may surprise the investors in the next year or two. Meantime, its not as attractive as the above three companies in term of fundamentals.
Kossan has been disappointing. Kossan continues to carry a lot of debt despite having been a long player in the market when many other players have benefited from the strong revenue and margin growths to pare down their borrowings. Its profit margin is below the average of the industry.
Adventa gets good press. However, when comparing its fundamentals with its peers, it is not such an attractive stock. Its dividend payout is the highest in the industry compared to the industry average of nearer 20%. Moreover, its PE is the highest among the glove companies, but this does not appear to reflect its growth potential.
Rubberex is a disappointment and stood up quite apart from the fast moving players in this industry.
There are also significant risks in this industry, best summarised here:
Solid earnings growth as supplanted by
- capacity expansion, and
- positive newsflow
Key risks include
- a sudden surge in latex price,
- energy input costs or
- an unfavourable ringgit/US$ foregin exchange rate movement.
Saturday 8 May 2010
A quick look at Top Glove (8.5.2010)
A quick look at Top Glove (8.5.2010)
http://spreadsheets.google.com/pub?key=tZlHVEhyDcVlmKxE5_V4reQ&output=html
http://spreadsheets.google.com/pub?key=tZlHVEhyDcVlmKxE5_V4reQ&output=html
Tuesday 27 April 2010
Comparative Analysis of Glove Companies
Comparative Analysis of Glove Companies
http://spreadsheets.google.com/pub?key=tiEBLAmYR0EJiE7ccJcc8bw&output=html
http://spreadsheets.google.com/pub?key=tiEBLAmYR0EJiE7ccJcc8bw&output=html
Wednesday 14 April 2010
Malaysian Glovemakers Fall on Higher Rubber, Ringgit
Bloomberg
By Barry Porter
April 13 (Bloomberg) -- Malaysian glovemakers led by Top Glove Corp. declined in Kuala Lumpur trading on the prospect a surge in rubber prices and a higher ringgit will increase costs and lower the value of overseas earnings, damping earnings.
Top Glove fell 4.4 percent to 12.90 ringgit at the close, its biggest retreat in almost a year. About 21 percent of the company’s revenues in the year to Aug. 31 were made outside Malaysia. Supermax Corp., which makes the majority of its sales in America, slid 3.6 percent to 6.64 ringgit.
Rubber futures reached a 20-month high in Tokyo trading yesterday, increasing the cost of latex used in medical and other protective gloves, while the ringgit touched a 23-month high against the dollar. A higher local currency reduces the value of overseas sales when converted back into ringgit.
“With higher latex costs, a weaker ringgit against the U.S. dollar and potential pricier energy costs, we see growing concern for earlier-than-expected margin compression,” AmResearch said in a report on April 9. Investors are concerned that glove-makers won’t be able to pass on all the increased costs to their customers, it said.
AmResearch downgraded the sector to “underweight” on April 9. Top Glove was cut to “hold” with a lower fair value of 12.50 ringgit. Kossan Rubber Industries Bhd. was reduced to “hold” with its fair value trimmed to 7.65 ringgit. The stock lost 4.4 percent to 7.56 ringgit today.
Demand Boost
Glovemakers have outpaced the broader market in the past 12 months as global health scares bolstered medical glove demand. Top Glove has jumped 141 percent in the period as first-quarter and second-quarter earnings almost doubled from a year earlier. Kossan rallied 136 percent and Supermax gained 498 percent.
Global demand rose by 10 billion units last year, while Malaysia manufacturers increased output by less than 5 billion pieces, according to Jason Yap, an analyst with OSK Research Sdn.
“Demand is still strong compared to supply,” Yap said in a telephone interview today. “Maybe by the end of this year it will reach equilibrium when additional capacity comes on stream.”
Yap, who believes today’s drops are “short-term retracements”, retains “buy” ratings on Malaysia’s largest glove makers, with a 15.15 ringgit share target for Top Glove, 11.30 ringgit for Kossan and 10.00 ringgit for Supermax.
--Editors: Richard Frost, Reinie Booysen
To contact the reporter on this story: Barry Porter at bporter10@bloomberg.net
To contact the editor responsible for this story: Linus Chua at lchua@bloomberg.net
Friday 2 April 2010
Brokers still bullish on gloves
Glove manufacturers: Buy
Nomura Securities Malaysia says the recently passed healthcare reform bill in the US will boost sentiment on the shares of glove makers like Kossan Rubber (7153) , Supermax and Top Glove. It has a "buy" call on all three stocks.
 |
The historic development in the US last Sunday will have a widespread impact and the immediate-term effects will all lead to an increased demand for healthcare from now on, the stockbroker said.
Nomura sees glove makers as only standing to benefit at the moment from these healthcare developments, given that gloves are relatively price-inelastic necessities.
"Besides the positive sentiment generated by the passing of the reform bill, we see all the companies as key long-term beneficiaries given their US sales exposure, with Kossan and Supermax being more well-placed to capitalise on demand upticks," the stockbroker said in a report on March 22.
Kossan Rubber makes half of its sales from the US, while Supermax has 42 per cent sales coming from there. Top Glove's US sales from the US is only 26 per cent.
"Given that Supermax pursues OBM model, its distribution arm, Supermax Inc, has existing ties with hospitals, nursing homes and dental clinics. This allows it to more directly tap in to any increased demand coming from those networks."
http://www.btimes.com.my/Current_News/BTIMES/articles/bv25a/Article/
Thursday 18 March 2010
Topglove has revised its target dividend payout ratio to 40 per cent from its net profit, up from 30 per cent in previous years.
 |
TOP Glove Corp Bhd (7113) , the world's largest glove manufacturer, saw its net profit for the second quarter to February 2010 double to RM72.3 million year-on-year.
This was attributed to the new sales secured especially from emerging countries and cost-saving measures implemented at all factories.
The quarterly net profit was also higher than the RM70.7 million net profit recorded in the first six months of 2009.
Its sales revenue rose 47 per cent to RM509.9 million during the quarter under review, Top Glove said in a statement.
Top Glove remains optimistic of its future outlook despite ongoing challenges such as the rise in raw material cost and weakening US dollar.
The company has revised its target dividend payout ratio to 40 per cent from its net profit, up from 30 per cent in previous years.
OSK Research Sdn Bhd said the interim results had been expected, given the continuous strong demand for natural rubber gloves.
The firm has maintained its "buy" call and target price at RM15.15.
It is valuing Top Glove at a premium to the industry average due to its leading market share of 22 per cent.
OSK Research also likes the company for having the right product mix (80 per cent natural rubber gloves which is the basic entry for examination gloves) and targeting the right market (developing countries).
"Traditionally, these countries such as Brazil have proven to give significant sales boost to the rubber glove companies once their government implemented the compulsory usage of gloves in their healthcare sector."
The firm said the main risk for Top Glove is when supply catches up with demand.
When that happens, the rubber glove manufacturers will no longer be able to sell their gloves at a premium price as well as pass on the entire cost rise to their customers in a timely manner.
Top Glove's group net profit for the first six months of 2010 was RM138.8 million, up 96 per cent from the previous first half.
Total revenue for the six months increased 34 per cent to RM982.2 million from RM732.6 million a year ago.
Top Glove has a large customer base spread over more than 180 countries and with a diversified range of products.
Sunday 21 February 2010
****Growth stocks as a class has a striking tendency toward wide swings in market price (II)
The striking thing about growth stocks as a class is their tendency toward wide swings in market price.
But is it not true, that the really big fortunes from common stocks have been garnered by those
The answer is "Yes."
Click to see:
10 Year Price Chart of Top Glove
But the big fortunes from single company investments are almost always realised by persons who have a close relationship with the particular company - through employment, family connection, etc. - which justifies them
5 Year Price Chart of Top Glove
2 Year Price Chart of Top Glove
1 Year Price Chart of Top Glove
6 month Price Chart of Top Glove
3 Month Price Chart of Top Glove
1 Month Price Chart of Top Glove
An investor without such close personal contact will constantly be faced with the question of whether too large a portion of his funds are in this one medium.
Click to see:
5 Year Price Chart of Top Glove
2 Year Price Chart of Top Glove
1 Year Price Chart of Top Glove
6 month Price Chart of Top Glove
3 Month Price Chart of Top Glove
1 Month Price Chart of Top Glove
Each decline - however temporary it proves in the sequel - will accentuate his problem; and internal and external pressures are likely to force him to take what seems to be a good profit,
Click to see:
5 Year Price Chart of Top Glove
2 Year Price Chart of Top Glove
1 Year Price Chart of Top Glove
6 month Price Chart of Top Glove
3 Month Price Chart of Top Glove
1 Month Price Chart of Top Glove
but one far less than the ultimate bonanza.
Click to see:
10 Year Price Chart of Top Glove
Comments:
Acquired 14/2/2007 34,540,661 (Bonus issue)
Disposed 6/4/2007 6,300,000
Acquired 9/5/2007 1,000,000
Acquired 22/6/2007 500,000
Acquired 12/7/2007 438,900
Acquired 18/7/2007 403,900
Acquired 25/7/2007 157,200
Acquired 12/9/2007 200,000
Acquired 18/9/2007 580,000
Acquired 24/3/2008 50,000
Expiration of ESOS-options 29/4/2008
(The only ESOS-option not converted and expired were those noted on 29/4/2008. After this date, Mr. Lim continued to convert ESOS-options at regular intervals and did not buy or sell other shares of his company. The large sale of shares in 6/4/2007 followed the large bonus issue Mr. Lim acquired on 14/2/2007.)
Click to see:
5 Year Price Chart of Top Glove
10 Year Price Chart of Top Glove
From the price chart of Top Glove, we can draw the following points:
The price of Top Glove peaked at around $14 at the beginning of January 2007.
It dropped to around $9 in February 2007.
In April 2007, the price was around $9.20 when Mr. Lim sold 6,300,000 shares; he did not sell at the highest price possible.
In May 2007, the price was around $8.95, Mr. Lim bought back 1,000,000 shares.
The share price continued dropping to $6.00 in September 2007; Mr. Lim bought back 580,000 shares.
Mr. Lim continued to buy from May 2007 to September 2007 a total of 2.9 million shares.
It was obvious that even Mr. Lim phased-in his buying of the shares at various prices, rather than timing the buying of his shares at the lowest price.
But is it not true, that the really big fortunes from common stocks have been garnered by those
- who made a substantial commitment in the early years of a company in whose future they had great confidence and
- who held their original shares unwaveringly while they increased 10-fold or 100-fold or more in value?
The answer is "Yes."
Click to see:
10 Year Price Chart of Top Glove
But the big fortunes from single company investments are almost always realised by persons who have a close relationship with the particular company - through employment, family connection, etc. - which justifies them
- in placing a large part of their resources in one medium and
- holding on to this commitment through all vicissitudes, despite numerous temptations to sell out at apparently high prices along the way.
5 Year Price Chart of Top Glove
2 Year Price Chart of Top Glove
1 Year Price Chart of Top Glove
6 month Price Chart of Top Glove
3 Month Price Chart of Top Glove
1 Month Price Chart of Top Glove
An investor without such close personal contact will constantly be faced with the question of whether too large a portion of his funds are in this one medium.
Click to see:
5 Year Price Chart of Top Glove
2 Year Price Chart of Top Glove
1 Year Price Chart of Top Glove
6 month Price Chart of Top Glove
3 Month Price Chart of Top Glove
1 Month Price Chart of Top Glove
Each decline - however temporary it proves in the sequel - will accentuate his problem; and internal and external pressures are likely to force him to take what seems to be a good profit,
Click to see:
5 Year Price Chart of Top Glove
2 Year Price Chart of Top Glove
1 Year Price Chart of Top Glove
6 month Price Chart of Top Glove
3 Month Price Chart of Top Glove
1 Month Price Chart of Top Glove
but one far less than the ultimate bonanza.
Click to see:
10 Year Price Chart of Top Glove
Comments:
- Be a good stock picker.
- Think as a business owner.
- Always look at value rather than the price. Do the homework.
- Buy and hold is alright for selected stocks.
- Compounding is your friend, get this to work the magic for you.
- Mr. Market is there to be taken advantage of. Do not be the sucker instead. BFS;STS.
- Always buy a lot when the price is low. Doing so locks in a higher potential return and minimise the potential loss. But then, if you have confidence in your stock picking, you would have picked a winner - it is only how much return it will deliver over time.
- Never buy when the stock is overpriced. Not observing this rule will result in loss in your investing. This strategy is critical as it protects against loss.
- It is alright to buy when the selected stock is at a fair price.
- Phasing in or dollar cost averaging is safe for such stocks during a downtrend, unless the the price is still obviously too high.
- Do not time the market for such or any stocks. Timing can increase returns and similarly harms the returns from your investment. It is impossible to predict the short term volatility of the stock, therefore, it is better to bet on the long-term business prospect of the company which is more predictable.
- By keeping to the above strategy, the returns will be delivered through the growth of the company's business.
- So, when do you sell the stock? Almost never, as long as the fundamentals remain sound and the future prospects intact.
- The downside risk is protected through only buying when the price is low or fairly priced. Therefore, when the price is trending downwards and when it is obviously below intrinsic value, do not harm your portfolio by selling to "protect your gains" or "to minimise your loss." Instead, you should be brave and courageous (this can be very difficult for those not properly wired) to add more to your portfolio through dollar cost averaging or phasing in your new purchases. This strategy is very safe for selected high quality stocks as long as you are confident and know your valuation. It has the same effect of averaging down the cost of your purchase price. However, unlike selling your shares to do so, buying more below intrinsic value ensures that your money will always be invested to capture the long term returns offered by the business of the selected stock.
- Tactical dynamic asset allocation or rebalancing based on valuation can be employed but this sounds easier than is practical, except in extreme market situations. Tactical dynamic asset allocation or rebalancing involves selling at the right price and buying at the right price based on valuation. Assuming you can get your buying and your selling correct 80% of the time;, to get both of them right for a profitable transaction is only slightly better than chance (80% x 80% = 64%). Except for the extremes of the market, for most (perhaps, almost all of the time), for such stocks, it is better to stay invested (buy, hold, accumulate more) for the long haul.
- Sell urgently when the company business fundamental has deteriorated irreversibly. (Reminder: Transmile)
- You may also wish to sell should the growth of the company has obviously slowed and you can reinvest into another company with greater growth potential of similar quality. However, unlike point 14, you can do so leisurely.
- In conclusion, a critical key to successful investing is in your stock picking ability. To be able to do so, you will need to acquire the following skills:
- To formulate an investing philosophy and strategy suitable for your investing time horizon, risk tolerance profile and investment objectives.
- The knowledge to value the business of the company.
- The discipline to always focus on value.
- The willingness to do your homework diligently.
- A good grasp of behavioural finance to understand your internal and external responses to the price fluctuations of the stock in the stock market.
- A good rational thinking regarding the risks (dangers) and rewards (opportunities) generated by the price fluctuations of the stock in the stock market.
Top Glove Insider action:
Tan Sri Dr. Lim Wee Chai
Disposed 26/1/2007 100,000 Acquired 14/2/2007 34,540,661 (Bonus issue)
Disposed 6/4/2007 6,300,000
Acquired 9/5/2007 1,000,000
Acquired 22/6/2007 500,000
Acquired 12/7/2007 438,900
Acquired 18/7/2007 403,900
Acquired 25/7/2007 157,200
Acquired 12/9/2007 200,000
Acquired 18/9/2007 580,000
Acquired 24/3/2008 50,000
Expiration of ESOS-options 29/4/2008
(The only ESOS-option not converted and expired were those noted on 29/4/2008. After this date, Mr. Lim continued to convert ESOS-options at regular intervals and did not buy or sell other shares of his company. The large sale of shares in 6/4/2007 followed the large bonus issue Mr. Lim acquired on 14/2/2007.)
Click to see:
5 Year Price Chart of Top Glove
10 Year Price Chart of Top Glove
From the price chart of Top Glove, we can draw the following points:
The price of Top Glove peaked at around $14 at the beginning of January 2007.
It dropped to around $9 in February 2007.
In April 2007, the price was around $9.20 when Mr. Lim sold 6,300,000 shares; he did not sell at the highest price possible.
In May 2007, the price was around $8.95, Mr. Lim bought back 1,000,000 shares.
The share price continued dropping to $6.00 in September 2007; Mr. Lim bought back 580,000 shares.
Mr. Lim continued to buy from May 2007 to September 2007 a total of 2.9 million shares.
It was obvious that even Mr. Lim phased-in his buying of the shares at various prices, rather than timing the buying of his shares at the lowest price.
****Growth stocks as a class has a striking tendency toward wide swings in market price (I)
The striking thing about growth stocks as a class is their tendency toward wide swings in market price.
Click to see:
1 Year Price Chart of Top Glove
2 Year Price Chart of Top Glove
5 Year Price Chart of Top Glove
The main characteristic of the stock market in the last few decades has been the injection of a highly speculative element into the shares of companies which have scored the most brilliant successes, and which themselves would be entitled to a high investment rating. (Their credit standing is of the best, and they pay the lowest interest rates on their borrowings.)
The investment caliber of such a company may not change over a long span of years, but the risk characteristic of its stock will depend on what happens to it in the stock market.
But is it not true, that the really big fortunes come from common stocks that have been garnered by those who made a substantial commitment in the early years of a company in whose future they had great confidence, and who held their original shares unwaveringly while they increased 10-fold or 100-fold or more in value?
Click to see:
10 Year Price Chart of Top Glove
Click to see:
1 Year Price Chart of Top Glove
2 Year Price Chart of Top Glove
5 Year Price Chart of Top Glove
The main characteristic of the stock market in the last few decades has been the injection of a highly speculative element into the shares of companies which have scored the most brilliant successes, and which themselves would be entitled to a high investment rating. (Their credit standing is of the best, and they pay the lowest interest rates on their borrowings.)
The investment caliber of such a company may not change over a long span of years, but the risk characteristic of its stock will depend on what happens to it in the stock market.
The more enthusiastic the public grows about it, and the faster its advance as compared with the actual growth in its earnings, the riskier a proportion it becomes.
But is it not true, that the really big fortunes come from common stocks that have been garnered by those who made a substantial commitment in the early years of a company in whose future they had great confidence, and who held their original shares unwaveringly while they increased 10-fold or 100-fold or more in value?
Click to see:
10 Year Price Chart of Top Glove
Sunday 31 January 2010
Rubber glove companies enjoy pricing power and steadily rising sales
Judging from the capacity expansion by rubber glove companies, it appears that larger glove companies like Top Glove, Supermax and Sempermed (Thailand) have more moderate expansion plans as a percentage of existing capacity, while smaller ones like Latexx and Adventa have more aggressive expansion plans and are likely to show higher earnings growth in 2010.
An oversupply of rubber gloves is unlikely in 2010 but could be a worry in 2011 when more capacity comes onstream. Assuming that the 150 billion-a-year medical glove market grows by 8% a year, an additional capacity of 12 billion gloves will be required per year. Rubber glove companies have been able to pass on higher costs arising from rising latex prices, with Top Glove increasing prices again in January 2010.
Nevertheless, producers of nitrile gloves may now enjoy better margins as the cost advantage that latex gloves enjoy over nitrile gloves may have narrowed as latex prices have risen faster than nitrile prices. Ratings of Malaysian rubber glove companies are still cheaper than those of Ansell, SSL International and the Malaysian market.
The Edge
1.2.2010
By Choong Khuat Hock
Comments:
The whole glove industry is growing. Due to capacity expansion and their smaller sizes, the smaller glove companies are expected to show faster earnings growth than the bigger glove companies.
The industry business is still resilient. Profit margin is either maintained or improving. Glove companies are still able to pass the cost to the customers. How long will this last?
This industry is highly competitive. The business is driven by volume and price. When capacity to supply outstrips demand, those companies with durable competitive advantage are expected to survive. Those low cost producers will be the big winners and leaders. Those companies that automate their production with good quality control will probably be able to lower their costs per unit through increasing productivity. It is possible that those leveraging on low human labour costs now with no or few plans for increasing automation of the manufacturing processes, may eventually lose out to the former in the future both in terms of quality, productivity and costs.
An oversupply of rubber gloves is unlikely in 2010 but could be a worry in 2011 when more capacity comes onstream. Assuming that the 150 billion-a-year medical glove market grows by 8% a year, an additional capacity of 12 billion gloves will be required per year. Rubber glove companies have been able to pass on higher costs arising from rising latex prices, with Top Glove increasing prices again in January 2010.
Nevertheless, producers of nitrile gloves may now enjoy better margins as the cost advantage that latex gloves enjoy over nitrile gloves may have narrowed as latex prices have risen faster than nitrile prices. Ratings of Malaysian rubber glove companies are still cheaper than those of Ansell, SSL International and the Malaysian market.
The Edge
1.2.2010
By Choong Khuat Hock
Comments:
The whole glove industry is growing. Due to capacity expansion and their smaller sizes, the smaller glove companies are expected to show faster earnings growth than the bigger glove companies.
The industry business is still resilient. Profit margin is either maintained or improving. Glove companies are still able to pass the cost to the customers. How long will this last?
This industry is highly competitive. The business is driven by volume and price. When capacity to supply outstrips demand, those companies with durable competitive advantage are expected to survive. Those low cost producers will be the big winners and leaders. Those companies that automate their production with good quality control will probably be able to lower their costs per unit through increasing productivity. It is possible that those leveraging on low human labour costs now with no or few plans for increasing automation of the manufacturing processes, may eventually lose out to the former in the future both in terms of quality, productivity and costs.
Friday 1 January 2010
Wednesday 16 December 2009
Top Glove posts RM65.2m 1Q net profit
The glove sector continues to be resilient and growing strongly. Topglove is the leader in the group. Watch the others too.
Top Glove posts RM65.2m 1Q net profit
Written by Loong Tse Min
Wednesday, 16 December 2009 14:50
KUALA LUMPUR: Latex glove maker Top Glove Corp Bhd whose share price surged Dec 15 on expectations of strong quarterly financial results on Wednesday, Dec 16 posted a 90.9% jump in net profit to RM65.2 million in its first quarter ended Nov 30, 2009.
In its results filing to the stock exchange during the midday trading break, the company attributed the strong growth in earnings to cost-savings measures implemented at all its factories, improvements in product quality, productivity as well as aggressive marketing strategies.
Revenue for the quarter grew 22.3% to RM472.3 million from RM386.1 million in the same quarter a year earlier, with earnings per share rising to 21.94 sen from 11.60 sen. No dividends have been declared for the period under review.
In the notes accompanying the quarterly filing, the company added that its group continues to strengthen its balance sheet and working capital position, currently in net cash position of RM222 million, with RM237.1 million cash in bank as at Nov 30, 2009.
The group also has fully redeemed the bonds outstanding before its maturity date in view of its strong cash flow position. According to the company, its finance cost for current quarter has reduced by 85% to RM400,000 from RM2.7 million in quarter ended Nov 30, 2008.
Going forward, Top Glove said: "The group is confident of continuous growth and good profitable performance in current financial year".
It disclosed that its factory in Klang has commenced installation of 16 new and more advanced glove production lines with completion expected by February 2010.
It has also begun CONSTRUCTION [] of another factory in Klang that will house an additional 16 production lines with target completion by July 2010. It is also installing nine more "latex concentrate centrifuge machines" in Thailand to be ready by January 2010.
The Top Glove group currently has 355 production lines in 19 factories with a capacity of 31.5 billion pieces of gloves per annum. Staff strength stands at 9,100 employees.
At 2.30pm, Top Glove was trading unchanged at RM9.53 with 400,700 shares changing hands.
http://www.theedgemalaysia.com/index.php?option=com_content&task=view&id=155812&Itemid=79
Top Glove Q1 net almost doubles
Published: 2009/12/17
Top Glove Corp Bhd (7113) said its first quarter net profit almost doubled to RM66.5 million on cost saving measures and aggressive marketing strategies.
Revenue for the quarter ended November 30 2009 rose 22 per cent to RM472.3 million from RM386.1 million previously.
"Top Glove has adapted well to the challenging business environment, resulting from cost-saving measures implemented at at our factories in Malaysia, Thailand and China.
"In view of the strong profit growth for the first quarter, we're optimistic of positive outlook for the next few quarters," chairman Tan Sri Lim Wee-Chai, said in a statement.
To meet higher demand for latex concentrate, Top Glove is installing nine more latex concentrate centrifuge machines in Thailand.
"We should be able to complete this upgrading works next month," said Lim.
Currently, the company is in net cash position of RM222 million, with RM237.1 million cash in bank as at November 30 2009. It has fully redeemed outstanding bonds before the maturity date.
Its finance cost is also down by 85 per cent to RM400,000 in the first quarter.
In the last 10 years, Top Glove's profits expanded at an average rate of 36 per cent. Its performance far outweighs global rubber glove demand growth of 10 per cent per year.
With installed capacity of 31.5 billion pieces of gloves a year, the world's biggest glovemaker continues to build on its size.
Factory 20, which is located in Klang, Malaysia, has commenced the installation of 16 new and advanced glove production lines and is targeted to be completed by February 2010.
As for Factory 21, it is being built and is expected to start operation towards the end of next year.
http://www.btimes.com.my/Current_News/BTIMES/articles/16top/Article/
Top Glove posts RM65.2m 1Q net profit
Written by Loong Tse Min
Wednesday, 16 December 2009 14:50
KUALA LUMPUR: Latex glove maker Top Glove Corp Bhd whose share price surged Dec 15 on expectations of strong quarterly financial results on Wednesday, Dec 16 posted a 90.9% jump in net profit to RM65.2 million in its first quarter ended Nov 30, 2009.
In its results filing to the stock exchange during the midday trading break, the company attributed the strong growth in earnings to cost-savings measures implemented at all its factories, improvements in product quality, productivity as well as aggressive marketing strategies.
Revenue for the quarter grew 22.3% to RM472.3 million from RM386.1 million in the same quarter a year earlier, with earnings per share rising to 21.94 sen from 11.60 sen. No dividends have been declared for the period under review.
In the notes accompanying the quarterly filing, the company added that its group continues to strengthen its balance sheet and working capital position, currently in net cash position of RM222 million, with RM237.1 million cash in bank as at Nov 30, 2009.
The group also has fully redeemed the bonds outstanding before its maturity date in view of its strong cash flow position. According to the company, its finance cost for current quarter has reduced by 85% to RM400,000 from RM2.7 million in quarter ended Nov 30, 2008.
Going forward, Top Glove said: "The group is confident of continuous growth and good profitable performance in current financial year".
It disclosed that its factory in Klang has commenced installation of 16 new and more advanced glove production lines with completion expected by February 2010.
It has also begun CONSTRUCTION [] of another factory in Klang that will house an additional 16 production lines with target completion by July 2010. It is also installing nine more "latex concentrate centrifuge machines" in Thailand to be ready by January 2010.
The Top Glove group currently has 355 production lines in 19 factories with a capacity of 31.5 billion pieces of gloves per annum. Staff strength stands at 9,100 employees.
At 2.30pm, Top Glove was trading unchanged at RM9.53 with 400,700 shares changing hands.
http://www.theedgemalaysia.com/index.php?option=com_content&task=view&id=155812&Itemid=79
Top Glove Q1 net almost doubles
Published: 2009/12/17
Top Glove Corp Bhd (7113) said its first quarter net profit almost doubled to RM66.5 million on cost saving measures and aggressive marketing strategies.
Revenue for the quarter ended November 30 2009 rose 22 per cent to RM472.3 million from RM386.1 million previously.
"Top Glove has adapted well to the challenging business environment, resulting from cost-saving measures implemented at at our factories in Malaysia, Thailand and China.
"In view of the strong profit growth for the first quarter, we're optimistic of positive outlook for the next few quarters," chairman Tan Sri Lim Wee-Chai, said in a statement.
To meet higher demand for latex concentrate, Top Glove is installing nine more latex concentrate centrifuge machines in Thailand.
"We should be able to complete this upgrading works next month," said Lim.
Currently, the company is in net cash position of RM222 million, with RM237.1 million cash in bank as at November 30 2009. It has fully redeemed outstanding bonds before the maturity date.
Its finance cost is also down by 85 per cent to RM400,000 in the first quarter.
In the last 10 years, Top Glove's profits expanded at an average rate of 36 per cent. Its performance far outweighs global rubber glove demand growth of 10 per cent per year.
With installed capacity of 31.5 billion pieces of gloves a year, the world's biggest glovemaker continues to build on its size.
Factory 20, which is located in Klang, Malaysia, has commenced the installation of 16 new and advanced glove production lines and is targeted to be completed by February 2010.
As for Factory 21, it is being built and is expected to start operation towards the end of next year.
http://www.btimes.com.my/Current_News/BTIMES/articles/16top/Article/
Thursday 10 December 2009
Glove makers’ capacity expansion on track
Glove makers’ capacity expansion on track
Tags: Adventa Bhd | Brokers Call | CIMB Research | Hartalega Holdings Bhd | Kossan Rubber Industries Bhd | Latexx Partners Bhd | MARGMA | Rubber gloves ssector | Supermax Corporation Bhd | Top Glove Corporation Bhd
Written by Financial Daily
Thursday, 10 December 2009 11:05
Rubber gloves sector
Maintain outperform: Last week, we hosted a rubber glove day which gave around 40 fund managers and buy-side analysts access to the six biggest rubber glove companies in Malaysia — TOP GLOVE CORPORATION BHD [], SUPERMAX CORPORATION BHD [], KOSSAN RUBBER INDUSTRIES BHD [], HARTALEGA HOLDINGS BHD [], LATEXX PARTNERS BHD [] and ADVENTA BHD [].
The Malaysian Rubber Glove Manufacturers’ Association (MARGMA) gave the opening remarks and touched on the ABCs of gloves, development of the industry, challenges faced as well as the prospects for the industry. This was followed by four sessions of small group meetings for each of the six firms.
Demand prospects for rubber gloves remain favourable and some of the manufacturers have even brought forward their expansion plans to cater to the high orders. Factors that could extend the sector’s re-rating include the continuing uptick in demand from the healthcare industry, ongoing capacity expansion and strong earnings growth. We maintain our overweight stance.
All the glove stocks under our coverage remain outperform, with Adventa and Supermax staying as our top picks. We raise our earnings forecasts for Adventa and Top Glove by 1% to 10%.
The event confirmed the companies’ expansion plans. Adventa and Kossan appear to be the most aggressive in their expansion. Latexx and Supermax have brought forward their expansion plans to cater to the high demand.
We were particularly surprised by Adventa’s plans to add lines with output of up to 36,000 pieces per hour, higher than even the most efficient producer currently, Hartalega, whose latest lines can produce up to 35,000 pieces per hour.
Hartalega has set its sights on the number one spot in the world for nitrile gloves, a goal which we think is not out of reach.
Among the issues raised include recent government policies to reduce the number of foreign workers which is a concern. Nevertheless, increasing automation will reduce their reliance on manpower. Glove manufacturers also raised the issue of not having enough supply of natural gas which is the most cost efficient form of energy.
To reduce their reliance on natural gas, all but Latexx and Kossan are now using biomass facilities.
The main issue for investors is the possibility of a glut given the industry’s aggressive expansion. We do not think this is a problem given the strong demand and good long-term prospects in developing countries where per capita consumption is low.
On top that, MARGMA and the rubber glove companies believe that prospects for the rubber glove industry will continue to improve given the continuous support by the government and the favourable outlook for the demand for rubber gloves. — CIMB Research, Dec 9
This article appeared in The Edge Financial Daily, December 10, 2009.
Tags: Adventa Bhd | Brokers Call | CIMB Research | Hartalega Holdings Bhd | Kossan Rubber Industries Bhd | Latexx Partners Bhd | MARGMA | Rubber gloves ssector | Supermax Corporation Bhd | Top Glove Corporation Bhd
Written by Financial Daily
Thursday, 10 December 2009 11:05
Rubber gloves sector
Maintain outperform: Last week, we hosted a rubber glove day which gave around 40 fund managers and buy-side analysts access to the six biggest rubber glove companies in Malaysia — TOP GLOVE CORPORATION BHD [], SUPERMAX CORPORATION BHD [], KOSSAN RUBBER INDUSTRIES BHD [], HARTALEGA HOLDINGS BHD [], LATEXX PARTNERS BHD [] and ADVENTA BHD [].
The Malaysian Rubber Glove Manufacturers’ Association (MARGMA) gave the opening remarks and touched on the ABCs of gloves, development of the industry, challenges faced as well as the prospects for the industry. This was followed by four sessions of small group meetings for each of the six firms.
Demand prospects for rubber gloves remain favourable and some of the manufacturers have even brought forward their expansion plans to cater to the high orders. Factors that could extend the sector’s re-rating include the continuing uptick in demand from the healthcare industry, ongoing capacity expansion and strong earnings growth. We maintain our overweight stance.
All the glove stocks under our coverage remain outperform, with Adventa and Supermax staying as our top picks. We raise our earnings forecasts for Adventa and Top Glove by 1% to 10%.
The event confirmed the companies’ expansion plans. Adventa and Kossan appear to be the most aggressive in their expansion. Latexx and Supermax have brought forward their expansion plans to cater to the high demand.
We were particularly surprised by Adventa’s plans to add lines with output of up to 36,000 pieces per hour, higher than even the most efficient producer currently, Hartalega, whose latest lines can produce up to 35,000 pieces per hour.
Hartalega has set its sights on the number one spot in the world for nitrile gloves, a goal which we think is not out of reach.
Among the issues raised include recent government policies to reduce the number of foreign workers which is a concern. Nevertheless, increasing automation will reduce their reliance on manpower. Glove manufacturers also raised the issue of not having enough supply of natural gas which is the most cost efficient form of energy.
To reduce their reliance on natural gas, all but Latexx and Kossan are now using biomass facilities.
The main issue for investors is the possibility of a glut given the industry’s aggressive expansion. We do not think this is a problem given the strong demand and good long-term prospects in developing countries where per capita consumption is low.
On top that, MARGMA and the rubber glove companies believe that prospects for the rubber glove industry will continue to improve given the continuous support by the government and the favourable outlook for the demand for rubber gloves. — CIMB Research, Dec 9
This article appeared in The Edge Financial Daily, December 10, 2009.
Tuesday 20 October 2009
Top Glove eyeing acquisition targets in Malaysia
Top Glove eyeing acquisition targets in Malaysia
Tags: Influenza A (H1N1) | KM Lee | M&A | Malaysian entities | Medi-Flex Ltd | organic growth | Top Glove Corp Bhd
Written by Chong Jin Hun
Monday, 19 October 2009 11:21
KLANG: Top Glove Corp Bhd’s potential merger and acquisition (M&A) targets are most likely to be Malaysian entities and any such exercises will only be carried out at low and attractive prices, its managing director KM Lee said.
They will be financed via internal funds, helped by its net cash position of some RM176 million.
“It’s good to keep it (cash) handy in case the oppportunity of possible M&As comes our way,” Lee told The Edge Financial Daily in an interview.
Organic growth and M&As are expected to be key highlights of Top Glove’s intention to retain its supremacy in the international glove manufacturing sector. It aims to increase its present global market share of 22% to 30% by 2012.
Top Glove had in 2007 finalised the acquisition of a controlling stake in Singapore-listed rival Medi-Flex Ltd for some S$21 million (RM50.86 million).
The purchase of Medi-Flex, which owns two glove manufacturing plants in Klang and Banting in Selangor, was intended to help Top Glove expand its product range to include medical and cleanroom gloves.
Going forward, Lee said Top Glove was forecasting a conservative 10% annual revenue growth for the current and next financial year as the company builds more factories and expands its domestic production capacity.
With a cash hoard of RM176 million, Lee says Top Glove is in a good position to look for acquisitions that will help it maintain its position as the world's biggest rubber glove producer. Photo by Suhaimi Yusuf
For now, a larger output for Top Glove is deemed crucial to fulfil rising global demand for disposable gloves, due to the Influenza A(H1N1) outbreak.
Lee said these factories, to cost some RM35 million each, would be built on company-owned industrial land in Klang.
“Capacity expansion is the one (factor) that will see us moving forward in the long term. It’s quite traditional for us to build one to two factories every year.
“A lot also depends on how the A(H1N1) unfolds in the coming winter months (in the northern hemisphere),” he said.
Top Glove’s latest set of financials has improved. Net profit more than doubled to RM56.83 million in the fourth quarter ended Aug 31, 2009 from RM25.11 million a year earlier, helped by cost efficiency and higher demand for disposable gloves due to the A(H1N1) outbreak. Revenue rose 17.2% to RM427.35 million from RM364.53 million.
Full-year net profit rose 53.6% to RM169.15 million from RM110.1 million, while revenue increased by 10.9% to RM1.53 billion from RM1.38 billion.
Globally, Top Glove owns 19 factories, of which 17 are glove production facilities while the remaining two are latex concentrate plants in Thailand.
The company has 13 glove factories in Malaysia, and two each in Thailand and China. Together, they produce up to 31.5 billion pieces of gloves a year.
The company may also build more factories in Thailand and China to meet rising global demand for gloves.
Top Glove has allocated some RM70 million for capital expenditure (capex) in the current financial year ending Aug 31, 2010, to finance the CONSTRUCTION [] of two factories in Malaysia with a combined annual capacity of three billion pieces of gloves.
This article appeared in The Edge Financial Daily, October 19, 2009.
Tags: Influenza A (H1N1) | KM Lee | M&A | Malaysian entities | Medi-Flex Ltd | organic growth | Top Glove Corp Bhd
Written by Chong Jin Hun
Monday, 19 October 2009 11:21
KLANG: Top Glove Corp Bhd’s potential merger and acquisition (M&A) targets are most likely to be Malaysian entities and any such exercises will only be carried out at low and attractive prices, its managing director KM Lee said.
They will be financed via internal funds, helped by its net cash position of some RM176 million.
“It’s good to keep it (cash) handy in case the oppportunity of possible M&As comes our way,” Lee told The Edge Financial Daily in an interview.
Organic growth and M&As are expected to be key highlights of Top Glove’s intention to retain its supremacy in the international glove manufacturing sector. It aims to increase its present global market share of 22% to 30% by 2012.
Top Glove had in 2007 finalised the acquisition of a controlling stake in Singapore-listed rival Medi-Flex Ltd for some S$21 million (RM50.86 million).
The purchase of Medi-Flex, which owns two glove manufacturing plants in Klang and Banting in Selangor, was intended to help Top Glove expand its product range to include medical and cleanroom gloves.
Going forward, Lee said Top Glove was forecasting a conservative 10% annual revenue growth for the current and next financial year as the company builds more factories and expands its domestic production capacity.
With a cash hoard of RM176 million, Lee says Top Glove is in a good position to look for acquisitions that will help it maintain its position as the world's biggest rubber glove producer. Photo by Suhaimi Yusuf
For now, a larger output for Top Glove is deemed crucial to fulfil rising global demand for disposable gloves, due to the Influenza A(H1N1) outbreak.
Lee said these factories, to cost some RM35 million each, would be built on company-owned industrial land in Klang.
“Capacity expansion is the one (factor) that will see us moving forward in the long term. It’s quite traditional for us to build one to two factories every year.
“A lot also depends on how the A(H1N1) unfolds in the coming winter months (in the northern hemisphere),” he said.
Top Glove’s latest set of financials has improved. Net profit more than doubled to RM56.83 million in the fourth quarter ended Aug 31, 2009 from RM25.11 million a year earlier, helped by cost efficiency and higher demand for disposable gloves due to the A(H1N1) outbreak. Revenue rose 17.2% to RM427.35 million from RM364.53 million.
Full-year net profit rose 53.6% to RM169.15 million from RM110.1 million, while revenue increased by 10.9% to RM1.53 billion from RM1.38 billion.
Globally, Top Glove owns 19 factories, of which 17 are glove production facilities while the remaining two are latex concentrate plants in Thailand.
The company has 13 glove factories in Malaysia, and two each in Thailand and China. Together, they produce up to 31.5 billion pieces of gloves a year.
The company may also build more factories in Thailand and China to meet rising global demand for gloves.
Top Glove has allocated some RM70 million for capital expenditure (capex) in the current financial year ending Aug 31, 2010, to finance the CONSTRUCTION [] of two factories in Malaysia with a combined annual capacity of three billion pieces of gloves.
This article appeared in The Edge Financial Daily, October 19, 2009.
Thursday 15 October 2009
Glove companies
Valuation
Supermax, Topglove and Kossan
http://spreadsheets.google.com/pub?key=tIzNTWdhdVSJ803HE80Xn8Q&output=html
Top Glove optimistic of good dividends
Top Glove optimistic of good dividends
Published: 2009/10/14
TOP Glove Corp Bhd's shareholders can expect better dividend income going forward based on the company's optimism of continuing to record double-digit growth for at least 1-2 years more based on strong demand for rubber gloves and its expansion.
For financial year ended Aug 31, 2009 (FY09), the world's largest rubber glove manufacturer paid a dividend of 22 sen, a 100 per cent increase from 11 sen previously.
Its chairman Tan Sri Lim Wee Chai said the company, which targeted to pay 30 per cent dividend annually, would consider a special dividend if it continued to record strong performance.
"The chances are always good for us to achieve growth of more than 10 per cent, at least for the next one to two years and this will translate into a possible high dividend.
"With good earnings and strong cash, we should also be able to pay a good or even better dividend in the coming years," he told a media briefing on the company's performance for 2009 financial year in Kuala Lumpur today.
As at Aug 31, 2009, Top Glove's cash in banks stood at RM197.2 million and total borrowings at RM20.5 million.
Lim said the global demand for rubber gloves grew at between 8-10 per cent annually.
He said Top Glove had enough cash to pay dividend and the land for expansion.
The company, which has been on expansion mode with the opening of a new factory every year, is enthusiastic about increasing its capacity either through organic growth or acquisitions.
Currently, it has the capacity to produce 31.5 billion pieces of gloves annually, but that will be increased to 34.5 billion next year with the operation of factory number 20 in February next year and factory number 21 somewhere in the middle of next year.
Each factory has the capacity to produce 1.5 billion pieces annually.
At the moment, it has 17 gloves factories and two latex concentrate factories and its target is to capture 30 percent of the global market by 2012 compared to 22 percent now.
Lim said the company's capital expenditure for FY2010 was RM70 million.
He said the company would continue to expand its manufacturing plants in Malaysia, Thailand and China.
"We have the land to build one or two more factories every year to meet the increasing demand," he said.
The company has 7.2 hectares in Klang for future development, 8.4ha in Thailand and six ha in China.
He said investment in China was a challenge as many companies had suffered losses.
Top Glove's venture, however, is profitable, he said.
On acquisition, he said, although Top Glove was receptive it would be careful as not all acquisitions would be successful.
He said money alone would not ensure the success of the acquisition as there were also a need for adequate resources in areas such as human resources and marketing.
For FY09, its pre-tax profit rose by 65 per cent to RM221.5 million from RM134.6 million in the same period of 2008.
Revenue surged 11 per cent to RM1.53 billion from RM1.38 billion previously.
The record profit has been achieved on a high EBITDA (earnings before interest, tax, depreciation and amortisation) margin of 18.7 per cent in FY2009 compared to 14.4 per cent in FY2008.
Executive director, Lim Cheong Guan, said the 18 per cent plus margin was on the high side and did not expected a repeat in the near term.
Lim, however, still expected the margin to be in 16-17 per cent range going forward based on strong demand for rubber gloves.
Meanwhile, another executive director, Lee Kim Meow, said the prospect for the rubber glove industry was bright given its resilience to recession and rising demand due to increase awareness among the governments on global health threats.
"We expect government allocations for healthcare-related products such as gloves, to increase in future and this will boost our business," he said.
China and India, including Malaysia spent about 4.5 per cent of their gross domestic product on healthcare compared with the US at 15.3 per cent.
Top Glove rose 24 sen to close at RM8.40 on Bursa Malaysia today. -- BERNAMA
http://www.btimes.com.my/Current_News/BTIMES/articles/20091014190121/Article/index_html
Published: 2009/10/14
TOP Glove Corp Bhd's shareholders can expect better dividend income going forward based on the company's optimism of continuing to record double-digit growth for at least 1-2 years more based on strong demand for rubber gloves and its expansion.
For financial year ended Aug 31, 2009 (FY09), the world's largest rubber glove manufacturer paid a dividend of 22 sen, a 100 per cent increase from 11 sen previously.
Its chairman Tan Sri Lim Wee Chai said the company, which targeted to pay 30 per cent dividend annually, would consider a special dividend if it continued to record strong performance.
"The chances are always good for us to achieve growth of more than 10 per cent, at least for the next one to two years and this will translate into a possible high dividend.
"With good earnings and strong cash, we should also be able to pay a good or even better dividend in the coming years," he told a media briefing on the company's performance for 2009 financial year in Kuala Lumpur today.
As at Aug 31, 2009, Top Glove's cash in banks stood at RM197.2 million and total borrowings at RM20.5 million.
Lim said the global demand for rubber gloves grew at between 8-10 per cent annually.
He said Top Glove had enough cash to pay dividend and the land for expansion.
The company, which has been on expansion mode with the opening of a new factory every year, is enthusiastic about increasing its capacity either through organic growth or acquisitions.
Currently, it has the capacity to produce 31.5 billion pieces of gloves annually, but that will be increased to 34.5 billion next year with the operation of factory number 20 in February next year and factory number 21 somewhere in the middle of next year.
Each factory has the capacity to produce 1.5 billion pieces annually.
At the moment, it has 17 gloves factories and two latex concentrate factories and its target is to capture 30 percent of the global market by 2012 compared to 22 percent now.
Lim said the company's capital expenditure for FY2010 was RM70 million.
He said the company would continue to expand its manufacturing plants in Malaysia, Thailand and China.
"We have the land to build one or two more factories every year to meet the increasing demand," he said.
The company has 7.2 hectares in Klang for future development, 8.4ha in Thailand and six ha in China.
He said investment in China was a challenge as many companies had suffered losses.
Top Glove's venture, however, is profitable, he said.
On acquisition, he said, although Top Glove was receptive it would be careful as not all acquisitions would be successful.
He said money alone would not ensure the success of the acquisition as there were also a need for adequate resources in areas such as human resources and marketing.
For FY09, its pre-tax profit rose by 65 per cent to RM221.5 million from RM134.6 million in the same period of 2008.
Revenue surged 11 per cent to RM1.53 billion from RM1.38 billion previously.
The record profit has been achieved on a high EBITDA (earnings before interest, tax, depreciation and amortisation) margin of 18.7 per cent in FY2009 compared to 14.4 per cent in FY2008.
Executive director, Lim Cheong Guan, said the 18 per cent plus margin was on the high side and did not expected a repeat in the near term.
Lim, however, still expected the margin to be in 16-17 per cent range going forward based on strong demand for rubber gloves.
Meanwhile, another executive director, Lee Kim Meow, said the prospect for the rubber glove industry was bright given its resilience to recession and rising demand due to increase awareness among the governments on global health threats.
"We expect government allocations for healthcare-related products such as gloves, to increase in future and this will boost our business," he said.
China and India, including Malaysia spent about 4.5 per cent of their gross domestic product on healthcare compared with the US at 15.3 per cent.
Top Glove rose 24 sen to close at RM8.40 on Bursa Malaysia today. -- BERNAMA
http://www.btimes.com.my/Current_News/BTIMES/articles/20091014190121/Article/index_html
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