Inelastic demand

16 December 2020 By Jennifer Hughes Follow @JennHughes13

The pandemic quadrupled the value of Malaysia’s Top Glove, the world’s biggest maker of protective handwear, to $13 bln. But investors eying vaccine developments are now deeply discounting its shares. As the herd hastily dumps Covid trades, there will be value left behind.

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Top Glove, the world’s largest maker of protective rubber gloves, on Dec. 9 reported a 2,030% jump in net profit from the same period a year ago, to 2.4 billion ringgit ($585 million) in the three months to Nov. 30.

The company estimated glove demand will grow by 20% in its financial year to Aug. 31, 25% in the following year and 15% after the pandemic.

Shares in Top Glove have quadrupled while local rivals have at least doubled in 2020 as demand has soared as a result of the pandemic.

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