• Top Glove issued a press release on 16 Jan 2021 to confirm that workers from four of its factories have recently tested positive for Covid-19. The company, however, did not specify the total number of infected workers. All employees at its Port Dickson facilities had gone for screening with the Ministry of Health on 14 Jan 2021, and the affected employees are currently under quarantine. Foreign workers who are under quarantine are in designated quarters, while Malaysian staff are undergoing the quarantine period at home.
   
• The company was also reported to be arranging for employees at the Sungai Puloh factory, Klang to undergo mass screening on 16 Jan 2021 while contact tracing and close contact screenings were being conducted at the facilities in Shah Alam and Kulim, Kedah.
   
• All the affected areas, including staff quarters and company vehicles, have since been disinfected, with all related costs for local and foreign employees were borne by the company. Meanwhile, Top Glove noted that all primary contacts of these employees over the past 14 days have been identified and placed under quarantine and will undergo subsequent tests before they are permitted to return to work.
   
• The impact on revenue is lower than 1% and is not material hence we are not making any changes to our earnings forecasts at this juncture. Our fair value is unchanged at RM6.50 based on CY22 EPS over 23x PER. Maintain HOLD recommendation.

Source: AmInvest Research - 18 Jan 2021