Top Glove looks to list in Hong Kong after 'supernormal' pandemic demand

Malaysia's Top Glove Corporation Bhd said it planned to list in Hong Kong within six to nine months after "supernormal" demand for gloves during the COVID-19 pandemic saw its quarterly profit skyrocket to a company record.

Executive chairman Lim Wee Chai said the world's top glove maker, which is already listed in Malaysia and Singapore, was in talks with bankers about the Hong Kong deal. "It's only a plan and we are talking to the bankers to see which is the most suitable method to go for listing in Hong Kong," he added in a virtual briefing. "As a whole we are a global company, we must expand our company to a bigger market so that (we are) visible in the world market."

Top Glove outlined the plans to list in the Asian financial centre as it posted its highest-ever quarterly net profit of 1.29 billion ringgit ($311.37 million), for its fourth quarter which ended on Aug. 31. That was 17 times higher than the 74.2 million ringgit it made a year ago, and easily surpassed the 349.2 million ringgit average analyst estimate from a poll by Refinitiv.

Revenue was up 161% year-on-year to 3.11 billion ringgit. Managing Director Lee Kim Meow said the financial results "hit an unprecedented high". Protective gear will still be required even when a vaccine becomes available, Top Glove added.

"With a triple-digit increase in the group's monthly order book and lead times closing in on the two-year mark, we expect to continue delivering solid results well into financial year 2021," Lee said . Glove demand remains at a "supernormal level", the company said, estimating demand would grow 25% next year from the 20% this year, and 15% post-pandemic.

Sales volumes for the quarter rose 42.5% from a year ago, and 16.6% for the 2020 financial year. Top Glove currently has the capacity to produce 85.5 billion glove pieces - one of a pair - a year and has earmarked 8 billion ringgit of capital expenditure over the next six years to add an additional 100 billion pieces of capacity.

Its new Vietnam factory is scheduled to be commissioned next month. ($1 = 4.1430 ringgit)

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