Top Glove : Medi-Flex still in the red Outperform Company Update

Thursday, October 8, 2009

- Medi-Flex (60% owned by Top Glove), reported yesterday full-year FY09 core net loss of RM4.6m as
compared to a net loss of RM5.8m in FY08.
- The improvement in earnings was largely due to: 1) lower latex cost; 2) favourable exchange rate
movements; and 3) improvement in cost as the factory was relocated to Banting from a rented factory in
Klang during the year.
- HoH, revenue rose by 34.3% on the back of higher utilisation rates. 2H09's net loss, however, fell to
RM6.0m (1H09 net loss of RM2.5m) as a result of a RM4.0m write-off in inventory and property, plant and
equipment, mitigated by lower finance cost (-83.9% hoh) and lower associate losses (-48.4% hoh).
- Management did not provide any turnaround target for Medi-flex this time round but expects losses to
narrow further in 1H10.
- No change to our forecasts for Top Glove and fair value of RM8.80 (based on target CY10 PER of 15x).