KLCI Index (12-month)
Research Team
 research@affinhwang.com
Alan Tan
Chief Economist | RESEARCH
 +603 2146 7540
alan.tan@affinhwang.com
| Top Calls | | Sector Update � Rubber products (NEUTRAL, downgrade)
- Better prospects priced in
All glove companies within our coverage reported better 2Q17/1H17 results yoy while margins rebounded sequentially as we believe the industry demand-supply dynamics has improved. Moving forward, we believe that automation and cost pass-through will be essential to protect margins while capacity expansion remains the key growth driver. The sector valuation has risen by 12.5% year-to-date. Nevertheless, we believe that the current sector forward P/E valuation of 19.2x has priced in the better prospects ahead and is no longer attractive. As such, we downgrade the sector to NEUTRAL with Top Glove as our sector top pick. |
For important disclosures, please refer to the Disclosure section at the end of the individual linked research reports. |
Opportunities Amidst Geopolitical Shifts
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