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 yr because the rollout of Covid-19 vaccinations worldwide dampened demand for gloves.

“Like in each enterprise, there’re at all times highs and lows. And you can not anticipate tremendous income to proceed for an extended, very long time. So, we’re glad that we had a very good run final yr,” Lee Kim Meow, Prime Glove’s managing director, instructed CNBC’s “Street Signs Asia” on Monday.

The corporate on Friday introduced a 48% year-on-year drop in web 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 yr in the past.

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

Like in each enterprise, there’re at all times highs and lows. And you can not anticipate tremendous income to proceed for an extended, very long time.

Lee Kim Meow

Managing Director, Prime Glove

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

Prime 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 yr, Prime Glove shares jumped 290% because it reported document gross sales and income, due to surging demand for gloves throughout the pandemic.

Hong Kong inventory itemizing

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

Lee instructed CNBC the corporate nonetheless needs to go forward with the itemizing. Prime 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 the benefits of having an inventory in Hong Kong, we felt that it is one thing that we have now to undergo,” mentioned the managing director.

“A list train in Hong Kong will put us in a great place to be the place we need to be to be able to thrive for our dream to be a Fortune International 500 firm within the yr 2030,” he added. | Prime Glove shares fall as Covid-induced demand eases


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