01/11/2013

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MALAYSIA: CIMB Research keeps Top Glove as neutral

"Our target price (RM5.97) is unchanged, still based on 13.05 times forward P/E, its two-year average. We prefer Hartalega (a world class manufacturer of gloves) in the glove sector," it said on 9 Jan. 2013. CIMB Research said during Top Glove's Q1, 2013 analysts' briefing, the company shared that it was pushing ahead with plans to automate and computerise its manufacturing facilities.By mid-2013, all its glove making plants should have the latest technology, attenuating higher labour costs."Investors should hold on to Top Glove but not build any more positions. The stock has the highest operating leverage in the sector, in our opinion, and is therefore the most susceptible to cost inflation (such as wages, energy, natural rubber)," said the research house.(Syed Rashid Ali, Karachi, Pakistan)
Source: Daily "The Star", Kuala Lumpur; 9 Jan 2013

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