Kenanga IB Research expects Top Glove to report of weaker set of 2Q19 results

Kenanga IB Research expects Top Glove to report of weaker set of 2Q19 results
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KUALA LUMPUR (March 11): Kenanga IB Research has kept its Underperform (UP) rating on Top Glove Corp Bhd with a lower target price RM4.20 (from RM4.45) and said it expects Top Glove to report of weaker set of 2Q19 results, which due later this month, as tell-tale signs like normalising demand, swelling capacities and intensified competition are pointing towards a slower result.

In a note today, the research house said anecdotal evidence suggesting that shorter delivery lead time means strong demand is tapering off coupled with competitive pressure and players ramping up production that could result in further ASP compression are prompting it to downgrade Top Glove’s FY19/FY20E by 5%/4%.

“Target price also cut from RM4.45 to RM4.20. It remains UP,” it said.