Top Glove Shares Slump on Closure of Plants due to Covid-19

KUALA LUMPUR: Shares of Top Glove Corporation Bhd fell to a low of RM6.80 early Tuesday trade after 28 of its factories in Kapar, Klang, will be closed in stages following a surge in Covid-19 cases.

At 9.10am, shares of the world’s biggest glovemaker fell 40 sen to RM6.95.

The fall in its share price also dragged down the FBM KLCI. The KLCI fell 3.13 points or 0.2% to 1,594.35.

Turnover was 762.74 million shares valued at RM350.57mil. There were 228 gainers, 296 losers an 343 counters unchanged.

“There are 1,067 cases there today (Monday) alone. The factories will be closed gradually so that their workers can be tested, ” Senior Minister Datuk Seri Ismail Sabri Yaakob was quoted saying.

Last Tuesday, a Top Glove workers’ dormitory and the surrounding area were placed under an enhanced movement control order (MCO).

AmInvestment Research said since Nov 18, , Top Glove has temporarily stopped production in 16 facilities in Meru, Klang. The balance of the 12 facilities in Meru have been operating at reduced capacities.Of the 28 above mentioned factories, 19 are glove production facilities with an estimated capacity of over 40 billion pieces per annum.

“The company has not revealed the monetary loss resulting from this closure. However, based on our rough estimates, assuming 19 of the 36 glove production factories operating in Meru, Klang are closed for two weeks, the total impact to Top Glove’s revenue will be around 2% which is not significant.

“We are not making any changes to our earnings forecasts at this juncture. However, we will monitor closely to assess the total loss and will adjust our numbers accordingly once the official numbers are announced. Maintain Holdwith an unchanged fair value of RM7.88 per share based on a five-year average price-to-earnings ratio of 28 times, ” it said.

Source: https://www.thestar.com.my/business/business-news/2020/11/24/top-glove-shares-slump-on-closure-of-plants-due-to-covid-19

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