Top Glove shares fall as Covid-induced demand eases

Shares of Malaysia’s Top Glove, the world’s largest medical glove maker, have fallen by greater than 50% this 12 months because the rollout of Covid-19 vaccinations worldwide dampened demand for gloves.

“Like in each enterprise, there’re all the time highs and lows. And you can’t anticipate tremendous income to proceed for a protracted, very long time. So, we’re glad that we had an excellent run final 12 months,” Lee Kim Meow, High Glove’s managing director, instructed CNBC’s “Street Signs Asia” on Monday.

The corporate on Friday introduced a 48% year-on-year drop in internet revenue to 608 million Malaysian ringgit ($145.11 million) within the June-to-August interval. Income was round 2.1 billion ringgit, 32% decrease than a 12 months in the past.

The outcomes “have been softer on the again of normalising demand, following mass vaccine rollout on a world scale, resulting in decrease gross sales quantity and [average selling prices], which weren’t matched by a corresponding discount in uncooked materials costs,” High Glove mentioned in its financial statement.

Like in each enterprise, there’re all the time highs and lows. And you can’t anticipate tremendous income to proceed for a protracted, very long time.

Lee Kim Meow

Managing Director, High Glove

As well as, the corporate’s gross sales have been hit by a U.S. import ban because of allegations of compelled labor practices. The ban was lifted earlier this month.  

High Glove shares in Malaysia fell greater than 5% on Monday, extending its year-to-date losses to over 52%.

Different Malaysian glove shares additionally declined, with Hartalega, Supermax and Kossan registering losses of between 3% and 5% on Monday.

Compared, the benchmark inventory index FTSE Bursa Malaysia KLCI Index dropped lower than 1% on the identical day.

Final 12 months, High Glove shares jumped 290% because it reported file gross sales and income, because of surging demand for gloves in the course of the pandemic.

Hong Kong inventory itemizing

High Glove delayed a plan to seek a “dual primary listing” to boost $1 billion on the Hong Kong Inventory Trade after the corporate was slapped with the U.S. import ban.

Lee instructed CNBC the corporate nonetheless needs to go forward with the itemizing. High Glove already has a main itemizing in Malaysia and a secondary listing in Singapore.

“We felt that for the aim of long-term enterprise, for the aim of shifting forward and taking a look at some great benefits of having a list in Hong Kong, we felt that it is one thing that we’ve to undergo,” mentioned the managing director.

“An inventory train in Hong Kong will put us in a great spot to be the place we wish to be with a view to thrive for our dream to be a Fortune World 500 firm within the 12 months 2030,” he added.

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