Firmer foothold in latex. Top Glove is acquiring a small latex glove player for MYR24m (or 1.5x historical P/BV). In view of the minimum wage hike and imminent gas hikes, we expect more small/inefficient players to phase out eventually. This will further consolidate Top Glove's foothold as the market leader for the latex segment and giving it greater control over the ASPs of latex gloves. We maintain our forecasts, BUY rating and TP of MYR6.00 (16x 2013 PER).

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Source: Maybank Research - 18 July 2012