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PETALING JAYA: Top Glove Corp Bhd
He is prepared to continue his share buyback activity as his cash pile has grown to more than RM3bil.
“We are in a net cash position of RM 3.4 billion. Our high cash generation allows us to finance capital spending internally, but also for strategic expansion, ”CEO Lim Cheong Guan (photo) said at a press conference yesterday.
The company, which has been actively buying back its shares as of late, also indicated that, in its opinion, the price of its shares at the current level is still considered cheap.
“According to the consensus, the profit anticipated by analysts for fiscal year 2021 (FY21) is RM8bil. Therefore, the price / earnings ratio (PER) at this price should be very cheap below eight times. And the dividend yield is also very good (between 6% and 8%), all of this is good value for money as the company continues to grow, ”said Top Glove President Tan Sri Lim Wee Chai.
StarBiz recently reported on December 1 that since September, Top Glove has spent close to RM1.14 billion to buy back its own shares from the market.
Following these aggressive share buyback exercises, Top Glove said it has 177.78 million net shares outstanding to date.
Its adjusted share capital is 8,196 million shares and its capitalization as of December 9 was RM56.06bil. On what it plans to do with the growing pile of cash, Top Glove said it would plan more dividends, capex expansion and strategic investments.
“We are always (also) looking for acquisition opportunities and will announce any special dividends,” the company said separately.
The world’s largest manufacturer of rubber gloves said it expects another year of record highs in terms of its financial performance due to continued strong demand for gloves.
“This first quarter is a strong and healthy start to fiscal year 21 that ended on November 30. First quarter revenue is only (already) 66% of fiscal 2020 revenue, ”Cheong Guan said at the beginning of the press conference.
“Our net profit (of RM2.38bil) also exceeded our fiscal year 2020 profit by 134%,” he added.
On the continued progress of a Covid-19 vaccine, Top Glove Managing Director Datuk Lee Kim Meow said the company is paying close attention to the actual effectiveness of the vaccine once it has been rolled out en masse.
“There are many reports that this is the fastest vaccine ever developed for a major pandemic. So, the effectiveness is not yet proven even though there are claims from the manufacturers, ”said Lee.
“In the coming weeks, a lot of people will be watching this trend.
“If some of these vaccines prove ineffective, scientists would continue to search for an effective vaccine,” he added.
Meanwhile, the company said it could return to full capacity in two to three weeks after the Covid-19 outbreak that was recently detected among its workers.
“The 5,000 positive cases have already been discharged and are in working order. In fact, they have been sent to the hospital for isolation for only five to six days and now they have been discharged to stay in the workers’ shelter and some of them are returning to work, ”said Wee Chai.
“They are able to work after getting a letter from Sungai Buloh Hospital. They have no symptoms.
“Even though they are being sent to the hospital, it’s not really that serious,” he added.
Top Glove also said that in the near future, it will change its hiring strategy to primarily employ locals for its factories, moving away from a high reliance on foreign workers prior to this.
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