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KUALA LUMPUR (Jan 4): Despite observed vaccine availability around the world, Credit Suisse remains positive in the glove industry due to its economic valuation and higher dividends.
Credit Suisse’s ASEAN Co-Head of Securities Research and Malaysia Research Director Danny Goh said the glove industry is trading at less than five times the P / E multiple against its historical average of 17%, and currently offers a dividend of more than 10%.
“So, in terms of valuation and dividend standpoint, the gloves offer very good value at the moment,” Goh said at Credit Suisse’s ASEAN 2021 Conference press conference today.
Based on glove makers’ feedback, Goh said the median sales price is still trending up from quarter to quarter, noting that 2021 “earnings are pretty much in the bag already.”
“While the pandemic does raise some questions about how long demand and selling prices could hold firm, but if we were to rely on feedback from some of the glove manufacturers, forward orders will last until 2022,” he said . additional.
From this perspective, he noted that glove stocks appear to be on the defensive at the moment, given that it is one of the few sectors that is experiencing positive earnings momentum, offering a very high dividend yield and trading at a very low valuation. in relation to history.
At noon today, the Big Four rubber glove manufacturers have eliminated the RM13.65 billion market capitalization in Bursa Malaysia, due to strong selling pressure which is possibly not thanks to the short selling ban that has risen as of today.
Read also:
RM13.65b Market Cap Cleared From Big Four Gloves Shares This Morning
Glove stocks start the new year on a bearish note; Top Glove trading volume exceeding 120 million shares in the first 30 minutes
Credit Suisse targets FBM KLCI to end 2021 at 1,795 points
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