KUALA LUMPUR: Top Glove Corp Bhd (Top Glove) stock strengthened in the session of trading on Bursa Malaysia yesterday, prompted by news that the company aimed to increase its total volume production by 10 per cent this year, via its capacity expansion of 52 production lines by August.
As at closing, the world’s largest rubber glove manufacturer’s share rose two sen to RM5.57 per share, with 890,200 shares changing hands.
The capacity expansion plan involves an additional 4.8 billion pieces of gloves per annum to a total of 45.1 billion pieces per annum in its factories in Banting, Klang and Ipoh.
The company was confident that the 10 per cent growth going forward was possible as the strong demand for glove is expected to continue given the enhanced healthcare standards and improved life expectancy.
HLIB Research, in its note, said gradual increase of nitrile gloves and its upstream diversification would benefit the company in the long run and mitigate volatility of natural rubber latex prices.
The research house, however, said Top Glove would experience lower net profit margins when compared to peers due to low exposure in nitrile latex gloves.
It maintained its ‘market perform’ rating on the stock, with a target price of RM6 per share. — Bernama