Top Glove shares tumble as Covid-induced demand declines
Shares of Malaysia’s Top Glove, the world’s largest manufacturer of medical gloves, have fallen by more than 50% this year, as the rollout of Covid-19 vaccinations around the world has dampened demand for the gloves.
âAs with any business, there are always ups and downs. And you can’t expect the super profits to continue for a very, very long time. So we’re glad we had a good run this year. last, “Lee Kim Meow, Top Managing Director of Glove, told CNBC’s” Street Signs Asia “Monday.
The company on Friday reported a 48% drop in year-on-year net profit to 608 million Malaysian ringgits ($ 145.11 million) from June to August. Turnover was around 2.1 billion ringgit, 32% lower than a year ago.
Results âwere weaker due to the normalization of demand, following the mass deployment of vaccines globally, resulting in lower sales volume and [average selling prices], which have not been offset by a corresponding reduction in raw material prices, âTop Glove said in his financial state.
Additionally, the company’s sales have been hit by an import ban into the United States over allegations of forced labor practices. The ban has been lifted earlier this month.
Top Glove shares in Malaysia fell more than 5% on Monday, extending its year-to-date losses to more than 52%.
Other Malaysian glove stocks also fell, with Hartalega, Supermax and Kossan recording losses of between 3% and 5% on Monday.
In comparison, the benchmark FTSE Bursa Malaysia KLCI Index fell less than 1% on the same day.
Last year, Top Glove shares jumped 290% as they posted record sales and profits, thanks to growing demand for gloves during the pandemic.
Hong Kong Stock Exchange
Lee told CNBC that the company still wanted to proceed with the listing. Top Glove already has a primary list in Malaysia and a secondary list in Singapore.
âWe felt that for the purpose of long-term business, in order to move forward and examine the benefits of having a listing in Hong Kong, we felt that this was something that we had to cross, âthe general manager said.
âA listing exercise in Hong Kong will put us in a good position to be where we want to be in order to thrive on our dream of being a Fortune Global 500 company in 2030,â he added.