PE ratio for this stock damn high wey. 180+

On one hand, I feel like I want to goreng and get 10 lots. On the other hand, it looks very overvalued

With all intents and purposes, topg has reached last December JPM target price.

Next question, will topg overshoot and by how much?

covid pumped it too high... otherwise should peaked around rm 3.6-4...and retrace to rm 2.5 would be good entry

No point to buy if it falls into this range. Dividend yield will be lower at that time. Unless u plan to hold long.
Next week would be good time to pump and wait announcement for factory reopen, imho

Hartalega is currently operating only at 70% of its capacity utilising 60% of its workforce, Kuan said.
....
Hartalega sees the average selling price of gloves to normalize by the first quarter of next year after having been on a downtrend since its peak moving into second of the year, Kuan said.

https://www.freemalaysiatoday.com/category/...o-glove-market/

https://www.bloomberg.com/news/articles/202...-hartalega-says

If you buying long term dividends then by all means go ahead

Current level 52 week low next week will be interesting whether retail buying is hunting due to CBP approval back 

Why invest in a stock which is most likely to earn less and less money the next few years?

Pre covid price levels. The prices around March last year was 1.60 (adjusted due to the bonus shares last year). And before that it was trading in the 1.10-1.39 range.

Making less money in the next few quarters. For every less money making quarter, how would the market react? Will the market be forgiving or will the market punish it lower every time? So why rush to buy now?

After these make less money quarters, how will TG perform? Will its earnings stabilise or will there be growth? What if it takes a long time to stabilise? For comparison, you could use the previous Sars pandemic as an example. After Sars, the industry was hit with massive over capacity, which drove selling prices lower for many years. So you gotta ask, what if this happens again?

why not buy in about 24 months time or after price turned for the better.

Previously, china glove producers were not strong competitors. some china glove producers have invested in upstream (nitrile), will have cheaper raw mat cost than topg.

From China export data, asp is likely to drop below pre pandemic level by the end of the year.

Ahh... I see. Cause in your initial post was 'why not'... nvm...

Yes, investments is all about the risks. Which is why I raised those questions. Those are the risks.

SARS.

Firstly, here's a sector report on the glove sector just on Sep 2019... not long b4 Covid.

and here is screenshot...



Despite the glove sector export recording 12% y-y growth, swelling capacity and intensified competitions caused pressured on the..... ASP.
See? 2019... and the glove sector had the issue of over capacity and pricing wars... since SARS day...

(that was posted on the stock market discussion thread not too long ago)

So, even from SARS, the gloves sector suffered from a long drawn over capacity and price wars. It was known as a sunset industry until Covid 19 hit.

Hence the risk. Over capacity is going to be worst as we are seeing more players now and then China. If you know China products or had dealt with Chinese players b4, you would know that in nature, they are extremely aggressive. Once they are in an industry, they WILL go all out and price wars follows without fail. It's early days now but the lowering prices can be seen already.

So you have supply issue. And then what about demand issue?

Yes, SARs, TG went up a lot...


but after that .... have a look at this multi year weekly chart (which has been price adjusted for bonus+dividends)




without another worldwide pandemic, glove stocks could be stuck for a long while....
Profits.... what is the risk? A long drawn profit decline is probably the worst scenario.... every year down about 10% type... cos the investor will never know when the rot will end....
or what if profit stagnates for a long time?

Dividends... yeah... dividends did look sexy but since the dividends is tied to a percentage of the profit, once the profit goes down, the dividends will go down in a hurry too.... as dividend drops, the stock price will follow....

lot's of concerns/risks....

and naturally, the logical question is what if the glove sector becomes back a sunset industry, just like how it was b4 Covid..... so does appeal to you as a good no brainer investment?
price declines... naturally will attract some value hunters... but just remember ... not value plays are safe... some do turn into value trap.
so do think about all these.... dun dive in just cos the stock appears to have fallen a lot.

Any advice to those who bought this share at rm6 or rm7? The only way I can think of is buy low to breakeven? Question is when is the right moment as price is getting lower and lower. It bounced back once a while but dropping again..

That's a advantage for glove industry in Malaysia.

This shall applies to other gloves company in malaysia but not for topglove, don't forget they have already issued out massive dividend and also the losses due to share buyback

don't only look at the biggest tree in the forest, learn to look at the whole forest too.

during price war, everyone except buyer are casualties. calculate your own risk before going in

p/s: topglove management so-so only, if you are serious into gloves, why not look at better ones

definitely not toglove

was assuming you are referring to Topglove because you posted on Topglove thread

Never ending down trend along with other glove players 🤔

I'm gonna give an unpopular opinion here to all the blind bulls for gloves. Tip, don't hold on to a loser. Averaging down, buy the dip etc are just sunk cost fallacy. Just cut loss, why lose more money as gloves drop further.

Everyone so surprised about analysts downgrading to sub RM2, technical 'analysis' constantly predicting a rebound (as good as astrology for me). Every broken support confirm got sifu come in and say more support, buy more.

Just look at precovid quarterly revenue, compare to covid, and then the most recent quarter. Doesn't take a genius with computers to see that the covid spike in sales is most likely gonna be a one-off thing. ASP price data also shows continuous trend towards normality ie precovid. Doing a simple DCF, even being really optimistic on 15% CAGR next 5 years with 0 capex also doesn't yield a price any higher than RM2.20. New players in the glove industry both locally and in China. You really gotta ask yourself, do you think that TG still can grow revenue and maintain margins as before? I personally don't think so, and there are further downside even when at RM2.20

"But what about covid profit? Must be worth something in the share price no? Share price must be higher than pre covid la." Yes, but no. Previous profit already accounted for in the cash balance of the company + any assets the company reinvested. For TG tho, not so much. Remember the special dividend they issued previously? All the buyback done by the company when it was RM6-ish? That's where all your covid profits went to, all the free cash flow being returned to shareholders already.

I'd be happy to be proven wrong, but if the next few quarters of profit continue to trend back to normality (the scenario that I think is most likely), TG is just gonna slowly trend towards sub RM2 no matter how many squiggly lines you draw on a chart. Even if there are sudden spikes in share price, it's not going to be long term

But ib can change their tp within few days while nothing has changed. Hmm agree with oversold but doesn't mean it won't go lower?