Will Top Glove Corporation Bhd Be The Latest Company To List In Singapore’s Stock Market?

Editor’s note: This article had previously erroneously stated that Medi-Flex was still listed and that it was one of the two glove manufacturers listed in Singapore. Please note that Medi-Flex was privatised by Top Glove in 2013. UG Healthcare is the other Singapore-listed glove manufacturer. The Fool deeply regrets the error. 

Singapore’s stock market may just see the addition of a new company soon. That’s because the Malaysia-listed Top Glove Corporation Bhd (KLSE:7113.KL) surprisingly announced yesterday a proposal for a secondary listing on the Singapore Stock Exchange by way of introduction.

Under the proposal’s terms, the Malaysia-listed Top Glove would not be issuing additional shares for the secondary listing. Instead, existing shareholders of the company in Malaysia would be able to choose to transfer his or her shares onto the Singapore Stock Exchange. One of the biggest companies that is currently dual-listed on both exchanges is the RM53 billion healthcare outfit IHH Healthcare Bhd (SGX: Q0F).

The addition of Top Glove would be exciting news for Singapore investors. For one, investors can get more choices as there are only two rubber glove manufacturing companies listed in Singapore at the moment, namely, Riverstone Holdings Limited (SGX: AP4) and Medi-Flex Limited (SGX: 5FF). Top Glove is actually a major shareholder of Medi-Flex because of an investment made back in 2006. UG Healthcare Corporation Ltd (SGX: 41A). 

If Top Glove does list in Singapore, investors here would be able to have the opportunity to invest in the world’s largest rubber glove manufacturer; the company currently has a production capacity of 45 billion gloves per year. For perspective, Riverstone has an annual production capacity of ‘only’ 5.2 billion gloves.

Moreover, with a market capitalisation of over RM6.6 billion (S$2.2 billion), Top Glove’s introduction – if it happens – can help increase the pool of large-cap companies in Singapore’s stock market.

It’s also worth noting that Top Glove has been one of the best performing stocks in Bursa Malaysia (Malaysia’s stock exchange) over the past 15 years. Since 2001, Top Glove’s shares have generated a total return (inclusive of gains from reinvested dividends) of 6,000%.

This return has likely been driven by a 23-fold increase in the company’s profit from RM16 million in fiscal 2001 (year ended 31 August 2001) to RM359 million in the 12 months ended 30 November 2015. The company has also never made a loss since fiscal 2001 and has consistently produced a return on equity of over 15% (except for fiscal 2011 when there was a ROE of 10%).

Foolish Summary

Given its track record, Top Glove looks like a well-managed and highly profitable business. If the company does succeed in listing in Singapore’s stock market, it would appear to be a positive thing for investors here.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore writer Stanley Lim doesn’t own shares in any companies mentioned.