The way I see it
GLOVE SELLDOWN WHOLLY UNREASONABLE - TOP GLOVE AGM SUMMARY
omione
Publish date: Wed, 06 Jan 2021, 04:06 PM
omione
0 17
I am a top-down-bottom-up investor. I spend time reading news from around the world to understand the facts and reasons behind the stories. This helps me discern the shifting sand of world economies at any point in time. It is integral to my stock selections. I use fundamentals to regularly update stocks on my watch list that have the potential to outperform. I make full use of technical tools to determine the timing of entries and exits.
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- Top Glove AGM Summary (by Malacca Securities MPlus)
- ASP in Q2FY21 is expected 30% higher than Q1FY21. The whole industry players in gloves manufacturing agreed that the ASP will remain strong for year 2021
- Delivery period increase from 30~40 days previous to 560 days and 370 days for nitrile and natural rubber gloves respectively. Note: Nitrile and natural rubber gloves comprises of around 90% of Top Glove revenue in FY20.
- US gloves stockpile reduced from 16.9 billion pieces to 2 billion pieces in October 2020.
- Some Top Glove customer stockpile for gloves reduced from 2~3 months to 1~2 weeks
- Exporting gloves to 195 countries currently.
- Has enough raw material for continuous manufacturing of gloves.
- Expects new players in gloves manufacturing facing issues from factory installing, workers and raw material issues.
- Dividend payout for Q2, Q3 and Q4FY21 will be 70% on PATAMI.
- Reason for share buyback (SBB) is because Top Glove thinks their company is undervalued at the purchased price and expects better return than putting into FD which gives 2% only. The amount of SBB is only 2.15% from the allowed 10% threshold
- Top Glove has 4 billion cash as of 31 Dec 2020.
- US Border issues will be resolved when the independent international consultant verified the hostels and accommodation meets the required of Workers Housing Act 446.
- All Top Glove factories that has been affected by Covid-19 lockdown has been resumed operations as of 20 Dec 2020. The lockdown is expected to impact 4% of the total revenue and profit.
- Top Glove is spending 100 million for next 3 years to build hostels for 7300 workers and using 95 million to acquire new apartments for 2700 workers
- Top Glove is moving towards automation direction which previously 1 million gloves need 8 workers and now only 1.6 workers.
- Top Glove current factory utilization rate is 95%
- Malaysia will remain the focus ground of gloves manufacturing activities at the same time expanding their existing foreign manufacturing plant.
- Top Glove Hong Kong listed is expected around mid 2021.
- Top Glove aims to achieve Fortune500 by 2035 with an expected CAGR of 20%. Note: Top Glove current CAGR is 28%
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