Brokers' take

Top Glove | Buy Target price: RM6.43 (S$2.11) Dec 18 close: S$1.95 Maybank Investment Bank, Dec 18

STRONGER Q1 FY2019 core net profit of RM110 million (+8 per cent quarter-on-quarter, +9 per cent year-on-year) made up 22 per cent of our and street's full-year forecasts.

Key takeaways from Q1 FY2019 results: (i) Revenue grew slightly q-o-q (+4 per cent q-o-q, +35 per cent y-o-y) due to higher USD/RM (+3 per cent q-o-q, -1 per cent y-o-y) and marginally higher sales volume (+1 per cent q-o-q, +19 per cent y-o-y). Meanwhile, average selling price was flattish q-o-q (+14 per cent y-o-y); (ii) EBITDA margin dipped slightly to 16 per cent (-0.3 percentage point q-o-q, +0.7 percentage point y-o-y) owing to the weaker vinyl earnings. The EBIT of its vinyl division weakened substantially to RM2 million (-70 per cent q-o-q, -77 per cent y-o-y) following the full resumption of supply in China.