KUALA LUMPUR (March 14): Hong Leong IB Research maintained its “Buy” rating on Top Glove Corporation Bhd with a lower target price of RM7.51 (from RM8.04) and said the glove maker’s 2QFY16 results will be released on March 16.

In a note today, the research house said Top Glove’s 2Q earnings will come in stronger year-on-year thanks to stronger US Dollar and lower raw material prices.

“However, on quarter-on-quarter basis, 2Q results should see a slowdown in earnings growth mainly due to strengthening of ringgit (MYR).

“Going forward, the company’s core earning is unlikely to achieve another record high due to expected stronger MYR and low average selling price (ASP),” it said.

HLIB Research said lower FY16-17 core earnings forecasts by 3%-5% as it lowered its ASP assumption and trimmed its ringgit assumption to RM3.80/US$ in its FY16-17 forecasts (versus RM4.00/US$ previously).

“Maintain Buy with a lower target price of RM7.51 (previously RM8.04) post earnings forecast adjustments, based on an unchanged P/E multiple of 20.6x CY17 EPS, +1SD above its 5-year historical average P/E,” it said.