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Monday, May 23, 2022

RHB raises Top Glove, Supermax fair values

RHB Research raised its fair values on rubber glove makers Top Glove Corp Bhd and Supermax Corp Bhd, saying both companies are “well positioned” to capture any demand surge stemming from China’s possible bird flu pandemic.

The glove makers will also benefit from falling latex prices, RHB said in a note on Tuesday.

The brokerage raised its fair value on Top Glove, the world’s largest rubber glove maker by volume, to RM7.11 from RM6.42. RHB lifted its fair value on Supermax, the world’s second largest rubber glove maker, to RM3.30 from RM2.68.

RHB also raised its fair value on rubber manufacturer Kossan Rubber Industries Bhd to RM4.15 from RM3.73 and the world’s largest synthetic rubber glove maker Hartalega Holdings Bhd to RM5.34 from RM5.07.

The research house said if the H7N9 outbreak worsens, Top Glove and Supermax would benefit most from the additional demand because of the firms’ spare capacity.

“Both Kossan and Hartalega, however, would not be able to reap the full benefit of the situation as both companies are already running close to full capacity,” RHB said.

The research house kept its ‘overweight’ call on the glove sector and retained its ‘buy’ calls on Top Glove, Supermax and Kossan, and its ‘neutral’ call on Hartalega on expectations of a bright sector outlook over the next quarter due to softening latex prices and the bird flu outbreak.

Shares of Top Glove inched down 0.16 per cent against the benchmark index’s 0.28 loss. Supermax’s shares were down 0.48 per cent as of 9.57am.– Reuters

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