KUALA LUMPUR (Jan 18): Top Glove Corp Bhd shares are trading at an unprecedented low price-to-earnings ratio (PER) of 4.9 times based on estimated earnings for the current financial year ending Aug 31, 2021 after what analysts believe was overdone selling on the stock as investors weighed the rubber glove manufacturer’s outlook against the global Covid-19 pandemic and usage of vaccines to curb the spread of the outbreak.

In a note today, RHB Investment Bank Bhd's (RHB IB) Alan Lim wrote that at Top Glove’s last closing share price of RM6.42, the stock's price has declined by 33% from its recent peak. 

"With long-term glove demand growth remaining intact — even after Covid-19 ends — we believe that the selling on Top Glove shares is overdone. 

"Recall that in 2011, after H1N1 ended, glove demand declined by only 1% year-on-year (y-o-y), and resumed its growth until today,” Lim said.

More to come