By Ying Xian Wong


Shares of Top Glove Corp. fell as much as 7.8% in early trading after analysts slashed target prices in the wake of a quarterly loss.

Shares dropped to 0.65 ringgit (14 U.S. cents) early Wednesday, taking year-to-date losses to 75%. The world's largest glove maker Tuesday reported a fiscal fourth-quarter loss of MYR52.6 million and a 52% on-year drop in revenue amid a continued decline in global demand for protective wear as much of the world moves on from the Covid-19 pandemic.

MIDF Research downgraded Top Glove to a sell and nearly halved its target price on shares to MYR0.54 from MYR1.01, saying that demand is likely to be soft as more countries enter endemic phases of Covid-19, and that rising costs will likely pose a problem.

"The group has limited room to fully pass on [costs] to the customer by further raising the selling prices on the back of the supply-demand mismatches and intense price competition from Chinese and Thai glove makers," MIDF said in a research note.

Hong Leong Investment Bank cut its target price on Top Glove to MYR0.54 from MYR0.83, while Maybank Investment Bank lowered its target to MYR0.52 from MYR0.65. Both maintained sell ratings, as they believe the outlook for Top Glove remains challenging.

Hong Leong analyst Sophie Chua Siu Li said in a note that she expects low factory-utilization rates in coming months, as glove buyers still have a significant amount of inventory on hand.

Top Glove's near-term outlook remains challenging because of continuing inventory depletion activities at the customers' end as competition is still stiff, especially from China, Maybank investment bank analyst Wong Wei Sum said in a note.


Write to Ying Xian Wong at yingxian.wong@wsj.com


(END) Dow Jones Newswires

09-21-22 0009ET