Highlights

AmInvest Research Reports

Author: AmInvest   |   Latest post: Wed, 12 May 2021, 11:43 AM

 

Top Glove Corp - Top Glove's update on CBP sanctions

Author:   |    Publish date:


Investment Highlights

  • We maintain our HOLD recommendation on Top Glove with an unchanged fair value (FV) of RM4.75/share. Our valuation is based on a PER of 20x on CY22F FD EPS, incorporating an ESG-adjusted discount of 3% for our rating of two stars.
  • Yesterday, Top Glove hosted a briefing addressing US Customs and Border Protection (CBP) concerns and Top Glove’s progress towards improving workers’ living conditions.
  • Here are the highlights:

1. Top Glove has engaged Impactt Ltd (Impactt), a UK-based ethical trade consultancy to assess and improve on the group’s fair labour practices by reference to the International Labour Organisation’s (ILO) 11 forced labour Indicators.

2. The group said that it has made significant improvements in several of its 11 forced labour indicators (Exhibit 1). Top Glove is actively requesting a Withhold Release Order (WRO) revocation by providing evidence to the CBP that it no longer engages in forced labour practices.

3. As for indicators, which are still unresolved, Top Glove has outlined its rectifying action plans (Exhibit 2). It aims to resolve its debt bondage issue by April 2021.

4. Additionally, in its efforts to comply with Act 446, the group has invested heavily on improving workers’ accommodation (Exhibit 3).

5. Glove ASP has fallen by 5% from 2QFY21’s levels. We estimate ASP to be US$75/1,000 gloves currently. This fall in price, attributable to a reduction in glove urgency, is in line with our assumptions. We do not believe that the resurgence in Covid-19 cases in countries such as Japan would reverse the drop as industry oversupply is expected to exert downward pressure on prices.

  • We are still wary of falling glove average selling prices (ASP), economic effects of the WRO and the accompanying reputational risks. We believe that until the CBP lifts the sanction, Top Glove’s future outlook remains significantly uncertain. We thus maintain our FV for now.

Source: AmInvest Research - 9 Apr 2021

Share this
Labels: TOPGLOV

Related Stocks

Chart Stock Name Last Change Volume 
TOPGLOV 5.35 +0.17 (3.28%) 12,222,500 

  Be the first to like this.
 


APPS
I3 Messenger
Individual or Group chat with anyone on I3investor
MQ Trader
View Trading Signals and run Live Backtest
MQ Affiliate
Earn rewards with MQ Affiliate Program
 
 

605  230  568 

ActiveGainersLosers
Top 10 Active Counters
 NameLastChange 
 FOCUS 0.06-0.005 
 GOCEAN 0.0450.00 
 MTOUCHE 0.285+0.005 
 TANCO-WB 0.07+0.02 
 PERMAJU 0.1450.00 
 TANCO 0.145+0.01 
 MINDA 0.145+0.02 
 UCREST 0.30+0.005 
 TAWIN-OR 0.065-0.005 
 CAREPLS 2.41+0.05 

FEATURED POSTS

1. MQ Trader - Introduction to MQ Trader Affiliate Program MQ Trader Announcement!

TOP ARTICLES

1. HOW PUMP AND DUMP SYNDICATES OPERATE IN BURSA, Please Avoid At All Costs, Calvin Tan Research THE INVESTMENT APPROACH OF CALVIN TAN
2. 木材价格暴涨,这家公司竟然没有人买?! Swim With Sharks
3. Are you an INTELLIGENT INVESTOR? You can beat Buffett with THIS STOCK with 100% return in 2 months! Ultimate Stock Tips
4. ARB Berhad – Not As Good As It Seems. Be Cautious. The 1994 Investor
5. U.S. Suffers Sharpest Rise in Poverty Rate in More Than 50 Years - Koon Yew Yin Koon Yew Yin's Blog
6. Calvin replies to CynicalCyan, THE INVESTMENT APPROACH OF CALVIN TAN
7. Number of Covid 19 cases solely depends on Government's efficiency - Koon Yew Yin Koon Yew Yin's Blog
8. World’s most vaccinated nation is spooked by Covid spike (Chinese-made Sinopharm vaccine widely used in Seychelles) News1
PARTNERS & BROKERS