Gloves top losers as investors lock in gains

TheStar Thu, Jan 14, 2021 10:06am - 1 week ago


While demand for gloves will likely remain stable post-Covid-19, the average selling prices (ASPs) of the product are expected to ease in the second half of 2021, according to AmInvestment Research. Pic shows barbers wering gloves to cut their customers' hair.

KUALA LUMPUR: Gloves were among the top losers on Thursday as investors decided it was time to lock in the gains from the recent rebound in the share prices.

At 10am, the FBM KLCI was up 5.86 points or 0.36% to 1,642.55. Turnover was 1.61 billion shares valued at RM1.11bil. Advancers led decliners 497 to 388 and 358 counters were unchanged.

Hartalega fell the most, down 60 sen to RM12.40, Supermax 23 sen to RM6.88, Kossan 20 sen to RM4.28 and Top Glove 18 sen to RM6.45.

AmInvestment Research had said while demand for gloves will likely remain stable post-Covid-19, the average selling prices (ASPs) of the product are expected to ease in the second half of 2021.

It expects the ASPs to decline by then, as there will no longer be a rush for gloves as compared to what happened at the beginning of the pandemic.

“Nonetheless, we expect ASPs will stabilise at a higher level than the pre-pandemic level due to the broader usage of gloves. Moreover, capacity expansion from glove companies will be able to cope with the future demand, ” AmInvestment Research said.

It maintained its “neutral” view on the sector, as it deemed valuations for glove companies under its coverage, namely Top Glove Corp Bhd, Kossan Rubber Industries Bhd and Hartalega Holdings Bhd, were already fully reflected in the companies’ earnings outlook.

While demand for gloves will likely remain stable post-Covid-19, the average selling prices (ASPs) of the product are expected to ease in the second half of 2021, according to AmInvestment Research.

The brokerage said it expects the ASPs to decline by then, as there will no longer be a rush for gloves as compared to what happened at the beginning of the pandemic.

“Nonetheless, we expect ASPs will stabilise at a higher level than the pre-pandemic level due to the broader usage of gloves. Moreover, capacity expansion from glove companies will be able to cope with the future demand, ” the research house said.

It maintained its “neutral” view on the sector, as it deemed valuations for glove companies under its coverage, namely Top Glove Corp Bhd, Kossan Rubber Industries Bhd and Hartalega Holdings Bhd, were already fully reflected in the companies’ earnings outlook.






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