A conducive operating environment. Upcoming 3QFY8/12 results is likely
to meet expectations. We expect Top Glove's earnings growth momentum to
sustain on the declining latex cost, stronger USD and higher sales
volume. Additionally, its current plant automation exercise will see the
group largely unscathed by the minimum wage hikes. Valuation is still
undemanding with forward PER of 14x, below its mean of 16x. Maintain BUY
and TP of MYR5.40 (16x CY13 PER).
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Source: Maybank Research - 11 June 2012
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