Monday, October 12, 2009

DJ MARKET TALK: CIMB Ups Top Glove Target To MYR10.55 Vs MYR9.86

GMT [Dow Jones] STOCK CALL: CIMB Research ups Top Glove (7113.KU) target to MYR10.55 (based 15X market PER) from MYR9.86 after company posted better-than-expected FY09 results; notes net profit of MYR169.2 million came in 9% above house estimate of MYR156 million, stoked by strong demand, continuous improvements in product quality and productivity, company's aggressive marketing strategies. Revises up FY10-12 earnings forecasts by 1%-11% after accounting for improved FY09 numbers, lower cost assumptions. Adds strong demand since H1N1 outbreak will likely continue in FY10; retains Outperform call. "Potential re-rating catalysts include this set of record earnings, the continuous uptick in demand and ongoing capacity expansion," says CIMB. Stock last 1.6% at MYR8.28.

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