KUALA LUIMPUR: Investors' sentiment in Top Glove Corp Bhd improved on Friday, June 24 as analysts became more upbeat about the world's largest glove maker following its diversification and latex prices off its peak.
At 4.07pm, it was up six sen to RM5.28.
Analysts said Top Glove's management had been proactive in diversifying into nitrile, as a defensive move against latex price volatility.
'With latex prices off its peak and gloves demand anticipated to recover, Top Glove is looking at a better 4QFY11,' a foreign research house said.
Top Glove consumes about 10 million kg of latex and 2.5 million kg of nitrile every month. Every RM1 drop in latex price translates to RM10 million raw material cost saving.
The management had said it expects the latex price to drop further to RM7 a kg in future with 90% chance. This is supported by higher supply coming on stream, especially from north east Thailand due to improving weather condition.
Latex price was at the highest level of RM10.99 a kg on April 11 this year and since then, it has declined to RM9.50 a kg as at June 20.
Analysts said Top Glove's 60%-70% of its production capacity is capable of producing nitrile glove. The company expects nitrile glove to contribute 17% and 26% to the production mix for this year end and next year respectively.
At 4.07pm, it was up six sen to RM5.28.
Analysts said Top Glove's management had been proactive in diversifying into nitrile, as a defensive move against latex price volatility.
'With latex prices off its peak and gloves demand anticipated to recover, Top Glove is looking at a better 4QFY11,' a foreign research house said.
Top Glove consumes about 10 million kg of latex and 2.5 million kg of nitrile every month. Every RM1 drop in latex price translates to RM10 million raw material cost saving.
The management had said it expects the latex price to drop further to RM7 a kg in future with 90% chance. This is supported by higher supply coming on stream, especially from north east Thailand due to improving weather condition.
Latex price was at the highest level of RM10.99 a kg on April 11 this year and since then, it has declined to RM9.50 a kg as at June 20.
Analysts said Top Glove's 60%-70% of its production capacity is capable of producing nitrile glove. The company expects nitrile glove to contribute 17% and 26% to the production mix for this year end and next year respectively.
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