Glove stocks buoyed by Top Glove's strong 2Q performance

Glove stocks buoyed by Top Glove's strong 2Q performance
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KUALA LUMPUR (March 9): Shares in Top Glove Corp Bhd gained as much as 4.76% in the afternoon session after posting another set of record quarterly results and dividend payout.

The counter touched an intraday high of RM5.28 before paring some gains, but still up 14 sen or 2.78% to RM5.18 at the time of writing, bringing a market capitalisation of RM42.49 billion. A total of 26.03 million shares exchanged hands.

Earlier today, the world's largest glove maker posted a net profit of RM2.87 billion or 35.77 sen per share for its second financial quarter ended Feb 28, 2021 (2QFY21), up 20.76% from RM2.38 billion in 1QFY21.

Quarterly revenue grew 12.74% to hit a record RM5.37 billion from RM4.76 billion in 1QFY21, despite an 8% decline in volume due to a temporary production halt in its Klang, Selangor facilities in November and December 2020.

It declared a second interim dividend of 25.2 sen per share for the quarter, bringing a total payout of 41.7 sen for the first six months ended Feb 28, 2021 (1HFY21).

The quarterly figure brought Top Glove's 1HFY21 net profit to RM5.23 billion — or 51.4% of consensus full-year earnings estimate of RM10.16 billion, Bloomberg data showed.

Now investors will be keen to observe the changes in average selling price and demand in its 2HFY21.

Riding on the news and the recent sell-off among glove counters, shares of other glove makers also gained at the time of writing.

Supermax Corp Bhd shares rose six sen or 1.43% to RM4.27, having touched as high as RM4.40 earlier, while Kossan Rubber Industries Bhd shares rose four sen or 1.09% to RM3.70.

Among lower liners, Comfort Gloves Bhd rose five sen or 2.51%, while Rubberex Corp (M) Bhd rose two sen or 1.75% to RM1.16.

Meanwhile, several counters traded unchanged, including Hartalega Holdings Bhd (RM9.70) and Careplus Group Bhd (RM1.57).

Read also:
Top Glove 2Q net profit surges 21% q-o-q to another record high of RM2.87b

Kang Siew Li