(TOPG MK/HOLD/RM5.51/Target: RM5.48)

Customers’ order flows are set to recover following the recent revision in glove ASPs to pass on savings from softening raw material prices. Coupled with contribution from its newly completed plant, this should see Top Glove’s margins and earnings recover in 4QFY17. Nevertheless, current valuations are fair and largely reflect most of the positive near-term sector catalysts. Maintain HOLD. Target price: RM5.48. Entry price: RM5.10.

Source: UOB Kay Hian Research - 21 Jun 2017