Stocks of Malaysia’s Top Glove, the world’s largest manufacturer of medical gloves, have fallen more than 50% this year as the global roll out of Covid-19 vaccinations dampened demand for gloves.
“As in any business, there are always ups and downs. And you can’t expect super winnings to last long, long. So we’re glad we had a good run last year,” said Lee Kim Meow, Top The Managing Director of Glove told CNBC’s “Street Signs Asia” on Monday.
The company on Friday announced a 48% year-over-year decline in net income to 608 million Malaysian ringgits ($ 145.11 million) for the June-August period. Sales were around 2.1 billion ringgits, 32% less than a year ago.
The results were “weaker due to the normalizing demand for the global introduction of vaccines, resulting in lower sales volumes and [average selling prices]which were not offset by a corresponding reduction in raw material prices, “said Top Glove in its annual financial statements.
As in any business, there are always ups and downs. And you can’t expect super wins to last for a long, long time.
Lee Kim Meow
Managing director, top glove
In addition, the company’s sales were hurt by a US import ban on allegations of forced labor practices. The ban was lifted earlier this month.
Top Glove shares in Malaysia fell more than 8% on Monday, increasing their year-to-date losses to over 54%.
Other Malaysian glove stocks also fell, with Hartalega, Supermax and Kossan dropping between 4% and 6% on Monday.
In comparison, the benchmark stock index FTSE Bursa Malaysia KLCI Index lost 1.3% on the same day.
Last year, Top Glove’s stock rose 290% thanks to soaring demand for gloves during the pandemic as it reported record sales and profits.
Listing in Hong Kong
Top Glove delayed a plan to seek a “double primary listing” to raise $ 1 billion on the Hong Kong Stock Exchange after the company was hit with the US import ban.
Lee told CNBC the company wanted to continue listing. Top Glove already has a primary listing in Malaysia and a secondary listing in Singapore.
“We felt that, for the sake of long-term business, in order to move forward and see the benefits of being listed in Hong Kong, we had to see this as something we had to go through,” said the executive director.
“A listing in Hong Kong will put us in a good position to be where we want to be to achieve our dream of being a Fortune Global 500 company in 2030,” he added.
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