MIDF Research maintains "buy" call on Top Glove

KUALA LUMPUR: MIDF Research has maintained its "buy" call on Top Glove Corporation Bhd with an unchanged target price (TP) of RM8.29.

In a note today, it said the call was backed by Top Glove's attractive valuation at a price-to-earnings ratio of 4.3x financial year 2021's estimated (FY21E) earnings and 12.8x FY22 forecast earnings, adding that it expects the company's dividend yield for FY21E and FY22F to be at 15.3 per cent and 3.9 per cent, respectively.

The research house said it has made no changes to earnings estimates on Top Glove, pending the completion of the rubber manufacturer's dual listing on the Hong Kong Stock Exchange (HKEX) which was initially targeted to take place by May or June.

Recently, Top Glove announced that it has revised its HKEX initial public offering down to 793.5 million new shares from its initial plan of issuing 1.5 billion new shares.

"Due to the changes, we expect the exercise to be delayed slightly, possibly by about a month.

"We are slightly positive on the revised plan as we think that it will be less dilutive for existing shareholders," added MIDF Research.

-- BERNAMA