KUALA LUMPUR (June 20): Hong Leong IB Research has maintained its “Hold” rating on Top Glove Corp Bhd at RM11.32 with a higher target price of RM10.81 (from RM9.95) and said Top Glove’s 9MFY18 core PATMI of RM336.6 million (+45.8% YoY) was within house and consensus expectation.

In a note today, the research house said utilisation rate is still hovering at c.90%, reflective of robust global demand.

“We adjust our FY19-20 earnings upwards by 7.5% and 5.0% as we factor in F30 and F31 with a combined capacity of 7.4 billion pieces (+13% to existin​​g capacity).

“However at these levels, Top Glove is trading at 27.1x FY19 PE which is above 2SD. Thus we maintain our Hold rating, albeit with a higher target price of RM10.81.

“We expect the share price to be supported by sentiment driven weakness in the Ringgit, which will continue to whet investors’ appetite for export stocks,” it said.