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KUALA LUMPUR (March 23): Top Glove Corp Bhd shares fell 1.94% to close at RM5.05, after trading in negative territory for most of the day, which is the dividend payment deadline. of the company.
The counter fell as much as 2.14% to its intraday low of RM5.04, before cutting some losses. At RM5.05, it has a market capitalization of RM41.43 billion, with 20.46 million shares traded.
The stock opened one sen or 0.19% higher at RM5.16 versus yesterday’s adjusted closing price of RM5.15. The stock subsequently reversed its fortunes today, sliding to an intra-morning low of RM5.08 before cutting losses at RM5.13 at 12pm.
At 5.13 yuan each, the world’s largest rubber glove maker had a market capitalization of RM42.09 billion. At that time, 9.6 million shares had been traded.
The drop in Top Glove’s share price was not unexpected.
Yesterday, Malacca Securities head of research, Loui Low, anticipated that Top Glove shares would fall on their ex date today for dividend payments.
“For those who bought the shares before the ex-dividend date, they will get the dividend, whereas if they are bought on or after the ex-dividend date, they will not get the dividend,” Low said.
Along with the publication of its results for the second quarter ended February 28, 2021 (2QFY21), on March 9 the group declared a second interim dividend payment of 25.2 sen per share, payable on April 6. is March 23 (today), while the authorization date is March 24 (tomorrow).
This brings the total dividends declared by Top Glove for the first half ended February 28, 2021 (1HFY21) to 41.7 sen / share, which represents a 253% increase over the full-year dividends for in fiscal year 20 of 11.8 sen per share.
In summary, Top Glove’s net profit for 2QFY21 increased 20.76% QoQ (QoQ) to RM 2.87 billion from RM 2.38 billion. Revenues grew 12.74% to a record RM5.37 billion from RM4.76 billion for 1TFY21.
For 1SFY21, net profit increased 22 times to RM5.23 billion from RM227.11 million a year ago, while cumulative revenue increased three times to RM10.12 billion from RM2.44 billion.
It is worth noting that its chief executive, Tan Sri Dr Lim Wee Chai, bought a further 1.74 million shares of the group on 19 March at RM 5.27 per share, bringing his stake in the glove maker to 2 , 13 billion shares or 26.59%.
Lim also has an indirect stake of 692.19 million shares or 8.651% of the group, according to Top Glove in a statement from the stock exchange.
Prior to this, he purchased two separate lots of shares of 3.83 million shares and 569,600 shares on March 15 and 16, respectively, at approximately RM5.20 each.
According to an initial calculation, Lim will earn around RM710.56 million from the group’s last dividend payment of 25.2 sen per share based on his total shareholdings.
Combined with the dividend payment of 16.5 sen / share for 1TFY21, it is expected to receive a lucrative total dividend payment of RM1.17 billion.
Meanwhile, Hong Leong Investment Bank (HLIB) Research maintained its Top Glove “buy” rating, with an unchanged price target (TP) of RM8.14, as it expects the group to post stronger QoQ results for 3QFY21. .
In a note yesterday, HLIB Research said the short-term outlook for the world’s largest glove maker remains positive following its recent meeting with company management.
The research house anticipates a stronger set of results despite an expected decline in average selling prices (ASP) for nitrile gloves and powder-free natural rubber gloves by 3% to 5% in April and May from the levels observed in February and March.
Read also:
The president of Top Glove accumulates 1.74 million shares and increases direct participation to 26.6%
HLIB Maintains Call ‘Buy’ Price Target on Top Glove Amid Expectations for Stronger Q3 Results
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