KUALA LUMPUR, Sept 8 — Comfort Gloves Bhd’s share reversed earlier gains to slip into the red at mid-morning as profit-taking kicked in after the company reported an impressive quarterly performance yesterday.
At 11.05 am, the rubber glove manufacturer’s share shrank 12 sen, or 2.91 per cent, to RM4.01 with 12.48 million shares changing hands.
In a bourse filing yesterday, Comfort Gloves said its net profit for the second quarter ended July 31, 2020 (Q2 FY21) surged six times to RM42.8 millionĀ from RM7.12 million a year ago, lifted by higher prices and sales volume, and better economies of scale that boosted the profit margin to 22 percent from six percent previously.
For the half of FY21 (1H FY21), the company’s cumulative net profit rose 3.8 times to RM59.14 million from RM15.53 million in the same period last year, while revenue jumped 47.67 per cent to RM350.86 million from RM237.59 million previously.
Hence, RHB Investment Bank Bhd has maintained its “buy” call on Comfort Gloves with a higher target price of RM5.70 from RM4.80 previously.
The research house said Comfort Gloves’ 1H FY21 earnings beat forecast due to better-than-expected average selling price (ASP), as the company had increased its monthly ASP by 5-10 per cent consecutively every month since COVID-19 started.
“In the near term, we expect Comfort Gloves to register a stronger set of results in Q3 FY21 in line with the higher ASP trend in the industry,” it said in a note today.
The research house anticipates the company is a beneficiary of the long-term uptrend of gloves consumption globally.
— BERNAMA
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