price target

 
 

Bang-up week on Wall Street ends with a whimper

NEW YORK, June 22 — Wall Street edged lower yesterday, as US Vice President Mike Pence’s decision to defer a speech on China policy increased optimism on upcoming trade talks between Washington and Beijing, while tensions between the United…


S&P 500 set to open at record high on dovish Fed

NEW YORK, June 20 — The S&P 500 index was set to open at a record high today, after the Federal Reserve reassured investors that it was ready to cut interest rates as soon as next month to counter growing risks to global and domestic growth….


The worst is over for Top Glove, say analysts

PETALING JAYA: Top Glove Corp Bhd, whose net profit fell 36.5% in the third quarter ended May 31, 2019 (3Q FY19), is expected to achieve better results moving forward, said analysts.

On Tuesday, the group said its net profit fell to RM74.67 million during the quarter from RM117.57 million a year ago due to a surge in natural rubber latex price and strong competition.

For the nine-months period, net profit was 12.5% lower at RM290.51 million from RM332.03 million a year ago.

CGS-CIMB said the worst is over for Top Glove as quarterly earnings may have bottomed during the quarter and expects the group to post stronger results ahead.

“Our optimism is premised on commissioning of new glove production capacity, tailwinds from weaker ringgit versus US dollar, improved supply-demand dynamics from better absorption of new glove supply and higher selling prices to reflect the recent increase in latex prices,” it said in its report today.

“In addition, we expect Aspion Sdn Bhd to record sequentially stronger results, backed by higher production output and better economies of scale,” it added. Aspion is a surgical glovemaker acquired by Top Glove last year.

CGS-CIMB lowered its FY19-21 EPS estimates by 2-15.6%, to account for higher latex prices, an increase in tax rates and lower average selling prices (ASP) for gloves due to pricing competition.

It maintained its “add” rating on the stock with a higher target price of RM5.20 from RM5.08 previously. Despite the weak 3Q FY19 results, it believes that any sell-down is a buying opportunity as the worst is over for Top Glove.

“We believe Top Glove remains attractive due to the defensive nature of its business, its position as the world’s largest glove maker and it is a beneficiary of potential tailwinds from weak ringgit to US dollar and higher glove demand from spillover effects of the US-China trade war,” said CGS-CIMB.

MIDF Research also expects an improved 4Q FY19 performance for the natural rubber glove segment as the effect of upward revisions in ASP will be reflected then.

The price of natural rubber latex recently subsided by 0.8% to RM4.67 per kg and given the slow demand, MIDF Research does not expect any further significant uptrend in the price. Furthermore, Top Glove will add more than 14.2 billion pieces of nitrile glove production capacity per annum by end-2020.

“At the end of this two-year plan, the group will become the largest manufacturer of nitrile glove with total production capacity of more than 30 billion pieces per annum. While the aggressive expansion in production capacity among glove manufacturers has resulted in pricing pressure, we expect this will be offset by a higher sales volume,” it said.

It revised its FY19 downward by 14.7% year-on-year to take into account the unexpected significant rise in natural rubber latex price in 3Q FY19 while FY20 has been revised marginally lower by 0.8%.

MIDF Research maintained its “neutral” recommendation with a lower target price of RM4.70 from RM4.75 previously.

Meanwhile, Affin Hwang Capital expects margins to recover in the subsequent quarters as Top Glove has raised prices by 17% to pass on the higher cost.

It downgraded Top Glove to “hold” from “buy” previously, with a lower price target of RM4.70 from RM4.90 previously. It also cut its EPS for FY19-21 by 2.8-12.8% to factor in the weaker 3Q FY19.



From sushi robots to farm drones: Japan Inc innovation thwarts BOJ’s efforts

TOKYO, June 17 — Bakeries in Japan deploy cash registers that ring up pastries by reading their shape and colour, construction robots scurry to lay out the next day’s building materials in the dead of night and machines churn out sushi rice…


CPO price to remain subdued

PETALING JAYA: The current reduction in stockpiles is unlikely to boost the subdued crude palm oil (CPO) price despite Malaysian palm oil inventories dropping 10.3% to 2.45 million tonnes in May from the previous month, according to analysts.

PublicInvest Research pointed out that even with the shrinking inventory, the CPO price remains muted as high production is expected to be kicking in soon.

“At the point of writing, CPO futures stood at a one-month low of RM1,986 a tonne, which is a barely break-even level for small and inefficient players.”

However, the research house is expecting a recovery in the CPO price to RM2,100-RM2,300 a tonne in the second half of the year due to stronger demand from China and India.

With regard to the uptick in exports, PublicInvest highlighted that India registered the strongest growth of 75% due to the prefer-ential import duty on refined palm oil.

Malaysia has also seen strong CPO demand from China since 2015 as it switches demand from soybean oil to palm oil due to the impact of the African swine flu issue.

Despite rising demand from key destinations such as India, Iran and the European Union (EU), MIDF Research said higher export demand was insufficient to lift CPO prices as it was overwhelmed by external developments that exert downward pressure on CPO pricing.

The research house explained that the CPO production remains in overdrive mode which dampened the effects of higher export demand, causing the inventory level to remain elevated on a year-over-year basis.

“The negative sentiments from the EU’s ban on palm-oil based biofuels in June 2019 and the spillover effects onto the EU’s palm oil-based food sector will continue to inhibit any recovery in CPO price as well. All in, we are maintaining our negative stance on the sector with an unchanged 2019 CPO price target of RM2,090 per tonne.”

Meanwhile, PublicInvest retains it target price of RM2,200 a tonne for CPO with a neutral outlook on the plantation sector for 2019.


CPO price to remain subdued

PETALING JAYA: The current reduction in stockpiles is unlikely to boost the subdued crude palm oil (CPO) price despite Malaysian palm oil inventories dropping 10.3% to 2.45 million tonnes in May from the previous month, according to analysts.

PublicInvest Research pointed out that even with the shrinking inventory, the CPO price remains muted as high production is expected to be kicking in soon.

“At the point of writing, CPO futures stood at a one-month low of RM1,986 a tonne, which is a barely break-even level for small and inefficient players.”

However, the research house is expecting a recovery in the CPO price to RM2,100-RM2,300 a tonne in the second half of the year due to stronger demand from China and India.

With regard to the uptick in exports, PublicInvest highlighted that India registered the strongest growth of 75% due to the prefer-ential import duty on refined palm oil.

Malaysia has also seen strong CPO demand from China since 2015 as it switches demand from soybean oil to palm oil due to the impact of the African swine flu issue.

Despite rising demand from key destinations such as India, Iran and the European Union (EU), MIDF Research said higher export demand was insufficient to lift CPO prices as it was overwhelmed by external developments that exert downward pressure on CPO pricing.

The research house explained that the CPO production remains in overdrive mode which dampened the effects of higher export demand, causing the inventory level to remain elevated on a year-over-year basis.

“The negative sentiments from the EU’s ban on palm-oil based biofuels in June 2019 and the spillover effects onto the EU’s palm oil-based food sector will continue to inhibit any recovery in CPO price as well. All in, we are maintaining our negative stance on the sector with an unchanged 2019 CPO price target of RM2,090 per tonne.”

Meanwhile, PublicInvest retains it target price of RM2,200 a tonne for CPO with a neutral outlook on the plantation sector for 2019.


Analysts split on Tesla 2019 delivery promises

JUNE 12 — Tesla Inc shares were down 2 per cent today, as analysts remained divided on the electric-carmaker’s chances of meeting delivery and production targets in the months ahead, despite Chief Executive Officer Elon Musk’s reassurances at…


European shares rise, aided by defensives amid gloomy trade outlook

LONDON, May 11 ― European shares rose yesterday, with surging shares of Thyssenkrupp and robust defensive stocks helping equities on the continent avert the losses seen among their US peers, which slid on persisting worries about US-China trade….


European shares take strength from banks, Adidas hits record high

LONDON, May 3 — European shares rose today, propped up by bank stocks amid a slew of corporate earnings reports, as the regional index licked its wounds a day after its worst loss in six weeks. The pan-European STOXX 600 index was up 0.4 per cent…