How to Evaluate Top Glove Stock

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Top Glove Corporation Berhad (TGP) is a manufacturer of rubber gloves and other protective equipment. It also makes dental dams and face masks. It has over 50 manufacturing facilities in China, Malaysia, and Thailand. Its products are used in many industries and applications, from construction to health care. Currently, the company employs over 55,000 people around the world.

However, the company has a number of challenges. For starters, it faces a global recession, a drop in demand for medical gloves, and the potential for a larger decline in share price. The company is also facing a larger than expected increase in supply in the global glove market, as well as new players entering and ramping up production capacity. Additionally, it has had to contend with high inflation and production disruptions from the ongoing conflict between Russia and Ukraine.

Analysts are split on Top Glove stock. Some expect earnings growth, while others expect earnings to contract. The stock has declined as a result. However, analysts expect it to regain its losses in 2020. The company has deferred its expansion plans into 2024 and 2025. This will allow Top Glove to reach its goal of producing 115 billion pieces per year. Top Glove also hopes its competitors will follow suit. However, it did concede that some customers refused to increase their prices. As a result, Top Glove’s competitive advantage could be eroded.

Another important factor to consider in evaluating Top Glove stock is its valuation. Currently, it trades for 14.5 times its FY23F earnings and a 3.5-percent dividend yield. This means that it is undervalued by some investors. If the shares are undervalued, they could potentially increase in value as the Hong Kong Stock Exchange is expected to attract a wider investor base.

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