Shares of Top Glove Corp Bhd fell 22 cents, or 3.24%, to RM6.57 after the kingdom announced it would open a paperwork against companies that it said failed to comply with allotments involving providing workers housing.
At 10:15 a.m., the glove manufacturer's stock posted a slight loss at RM6.69, still down 10 cents or 1.47%. Top Glove shares were among the counterparts who lost the most on this morning's trading session.
At RM6.69, the company's market capital value was RM54.83 million.
Top Glove also saw 22.05 million of its shares swap hands, making it the most actively traded stock on the Bursa Malaysia this morning.
AmInvestment Bank Research analyst, Thong Pak Leng, received his note today that this latest development has the potential to increase Top Glove's risk premium, causing the investigation firm to reduce its earnings ratio (PER) to 25 times from 28 times before.
“Standing 25 times double PER, we achieved a lower accurate value (FV) of RM7.03 per share versus RM7.88 per share for Top Glove based on the 2022 earnings per share (EPS) budget.
"While the plan is still being implemented, we will not make any changes to the current income forecast," he said.
Pak Leng also perpetuated the 'hold' advice on Top Glove shares.
Meanwhile, CGS-CIMB analyst Walter Aw said that following the note, Top Glove would need to pay a fine of RM15 million if found guilty. The amount concerned is 0.14% of the EPS budget for the financial year ending 31 August 2021 (FY21) by his party.
"At this time, it is difficult for us to assess the impression of the fine imposed by the Ministry of Human Resources on Top Glove while waiting for further details such as the amount and charges that will be imposed on Top Glove," he said.
He also did not make any changes to the EPS budget from FY21 to FY23 and is waiting for the latest announcement regarding the case.
Aw however perpetuated the 'add' advice for Top Glove's stock with a target price (TP) of RM10.
