Top Glove shares fall as Covid-induced demand eases

Top Glove shares fall as Covid-induced demand eases

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Shares of Malaysia’s Top Glove, the world’s largest medical glove maker, have fallen by greater than 50% this 12 months because the rollout of Covid-19 vaccinations worldwide dampened demand for gloves.

“Like in every business, there’re always highs and lows. And you cannot expect super profits to continue for a long, long time. So, we’re glad that we had a good run last year,” Lee Kim Meow, Top Glove’s managing director, informed CNBC’s “Street Signs Asia” on Monday.

The firm on Friday introduced a 48% year-on-year drop in internet revenue to 608 million Malaysian ringgit ($145.11 million) within the June-to-August interval. Revenue was round 2.1 billion ringgit, 32% decrease than a 12 months in the past.

The outcomes “were softer on the back of normalising demand, following mass vaccine rollout on a global scale, leading to lower sales volume and [average selling prices], which were not matched by a corresponding reduction in raw material prices,” Top Glove mentioned in its monetary assertion.

Like in each enterprise, there’re at all times highs and lows. And you can’t anticipate tremendous income to proceed for an extended, very long time.

Lee Kim Meow

Managing Director, Top Glove

In addition, the corporate’s gross sales had been hit by a U.S. import ban attributable to allegations of pressured labor practices. The ban was lifted earlier this month.  

Top Glove shares in Malaysia fell greater than 8% on Monday, extending its year-to-date losses to over 54%.

Other Malaysian glove shares additionally declined, with Hartalega, Supermax and Kossan registering losses of between 4% and 6% on Monday.

In comparability, the benchmark inventory index FTSE Bursa Malaysia KLCI Index dropped 1.3% on the identical day.

Last 12 months, Top Glove shares jumped 290% because it reported document gross sales and income, because of surging demand for gloves in the course of the pandemic.

Hong Kong inventory itemizing

Top Glove delayed a plan to hunt a “dual primary listing” to lift $1 billion on the Hong Kong Stock Exchange after the corporate was slapped with the U.S. import ban.

Lee informed CNBC the corporate nonetheless desires to go forward with the itemizing. Top Glove already has a major itemizing in Malaysia and a secondary itemizing in Singapore.

“We felt that for the purpose of long-term business, for the purpose of moving ahead and looking at the advantages of having a listing in Hong Kong, we felt that it’s something that we have to go through,” mentioned the managing director.

“A listing exercise in Hong Kong will put us in a good spot to be where we want to be in order to thrive for our dream to be a Fortune Global 500 company in the year 2030,” he added.

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