Saturday, October 10, 2009

Top Glove finances will support expansionTop Glove finances will support expansion

Published: 2009/10/09

Top Glove Corp Bhd's solid financial position is expected to support its expansion plan and dividend return, said MIDF Research today.

Top Glove, with a net cash position of RM176.6 million or 58.4 sen per share as at 4QFY09, has said it plans to instal 16 production lines at its factory.

The company also plans to construct a new factory, which will house 16 production lines, and targeted for complettion by July 2010.

"All in, a total of three billion pieces per annum will be added to the existing capacity of 31.5 billion pieces per annum," MIDF Research said in a research note today.

The group, it said will continue to benefit from an increasing demand for gloves following the H1N1 outbreak.

"We also believe, stock up activities will also boost orders for medical glove," it added.

Agreeing with this, OSK Research in its research note said, developing countries such as those in Latin America, China and India, would further spur demand for the company''s medical gloves.

"We continue to like Top Glove for its market leadership of a commanding 24 per cent of the global market," OSK Research added.

Top Glove, which recorded a better-than-expected result, would remained profitable on sustained demand and weaker US dollar assumption when compared with FY09.

MIDF Research said as such, it had raised its financial year 2010 forecast earning for the company by 14.9 per cent, to RM180.2 million.

Top Glove's 4QFY09 pre-tax profit rose 45.4 per cent quarter-on-quarter to RM79 million from RM54.3 million previously, while revenue climbed 14.9 per cent from RM372 million to RM427.3 million. -- BERNAMA

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