KUALA LUMPUR: Malaysia's top four glove makers have seen their market value nosedive as the effects of the Covid-19 pandemic eases leading to lower average selling price (ASP) of gloves.
In total, Top Glove Corporation Bhd, Hartalega Holdings Bhd, Kossan Rubber Industries Bhd and Supermax Corporation Bhd had seen RM51.37 billion of their market capitalisation wiped off since a year ago.
Rakuten Trade Sdn Bhd vice president of equity research Thong Pak Leng said the prospects for the glove sector was not promising due to gradual decline of the ASP.
"The prospect for the sector is not very good now as the ASP is declining while competition in the sector is also getting stronger. As for investors, it is not the time to look at glove stocks now," he told the New Straits Times.
Top Glove saw the biggest decline in its value as it lost RM24.71 billion since June 30 last year, based on its outstanding shares of RM8.01 billion.
The stock stood at RM1.06, down RM3.11 or 74.58 per cent at mid-day closing yesterday compared to a year ago, pushing its market capitalisation down to RM8.70 billion from RM33.4 billion.
Top Glove enjoyed supernormal profits for its financial year ended August 31, 2021 (FY21) which surged 349.1 per cent to RM7.87 billion from RM1.75 billion in FY20.
However, its earnings began to plunge in the first quarter (Q1) ended November 30, 2021 (FY22) to RM185.72 million from RM2.36 billion posted in the same period in 2020.
For its Q2, the glovemaker's net profit slumped 97 per cent year-on-year (YoY) to RM87.55 million while in Q3 the figure further plunged 99.2 per YoY cent to RM15.29 million.
Top Glove said normalisation of ASPs and higher production costs due to inflation were among the factors that dragged its performance.
As at Thursday, Hartalega had a market capitalisation of RM9.67 billion. This was far lower than its value a year ago which stood at RM25.14 billion based on outstanding shares of RM3.42 billion.
Its share price stood at RM2.82 at midday closing yesterday, down RM4.53 or 61.63 per cent in a year.
The company raked in a net profit of RM2.89 billion in its year ended March 31, 2021 (FY21), which was a surge of 565.4 per cent against RM433.62 million posted in FY20.
Its earnings for FY22 was up by 12.1 per cent to RM3.23 billion, driven by higher revenue which jumped 17.7 per cent to RM7.89 billion during the same period from RM6.70 billion in FY21.
The group, however, posted a first-ever net loss of RM197.9 million in its Q4 ended March 31, 2022 from a net profit of RM1.12 billion in the same quarter a year ago. It said this was attributed to the provision of Prosperity Tax.
As for Kossan, its market capitalisation came in at RM3.45 billion yesterday, down by 4.76 billion from RM8.21 billion a year ago, based on outstanding shares of RM2.55 billion.
The stock was priced at RM1.35, or RM1.87 or 58.07 per cent lower since June 30 last year.
Kossan logged a net profit of RM2.85 billion for its year ended December 31, 2021 (FY21), up by 162.6 per cent from FY20.
It, however, recorded a lower net profit in Q4 2021 at RM218.67 million versus RM543.42 million the previous year's corresponding period.
For Q1 2022, the glovemaker's net profit further slipped to RM90.1 million from RM1.04 billion in Q1 2021
Supermax also saw a drop in its market value from RM8.78 billion a year ago to RM2.35 billion at mid-day closing yesterday,
The stock closed RM2.43 or 73.64 per cent lower at 87 sen from a year ago.
For its full-year results ended June 30, 2021 (FY21), the group posted a net profit of RM3.81 billion, up 626.6 per cent YoY from RM524.8 million the year prior. Net profit for Q4 FY21 stood at RM958.71 million versus RM398.83 million in Q4 the previous year.
Its latest net profit for Q3 ended March 31, 2022, however, slumped to RM13 million from RM1 billion in Q3 FY21.