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What Investors Should Know About Top Glove Corporation Bhd’s Trading Debut In Singapore

Top Glove Corporation Bhd (SGX: BVA), the world’s largest rubber glove maker by volume, made its debut on Singapore’s stock market yesterday.

The company, which previously was listed only on Bursa Malaysia, the stock exchange of Malaysia, had gone for a secondary listing in Singapore by way of introduction.

Top Glove currently has the capacity to produce 45 billion gloves annually and it exports its products to more than 195 markets worldwide. Over the last 12 months, the company generated RM2.88 billion (S$0.96 billion) in revenue and had earned a profit of RM398 million (S$133 million).

In comparison, Riverstone Holdings Limited (SGX: AP4), the next largest rubber glove maker listed in Singapore, had raked in revenue and profit of ‘just’ RM581 million (S$194 million) and RM127 million (S$42 million), respectively, over the past year.

Top Glove’s purpose for having a secondary listing is to improve its investor reach and to tap into a new platform for potential fundraising activities in the future. Top Glove also thinks that  having a secondary listing here would improve the trading liquidity of its shares.

Existing shareholders of the company would be able to transfer their shares between the two exchanges. Investors can thus decide if they want to trade Top Glove’s shares in Singapore or Malaysia.

No new shares of Top Glove were issued for the secondary listing. Instead, members of Top Glove’s management team will sell at least $20 million worth of Top Glove shares that they own. The sale will take place in Singapore’s market over the next 12 months.

Top Glove’s shares now trades at a price of S$1.635 each, giving the company a market capitalization of S$2.06 billion. The company is valued at 15.3 times earnings at that price. It’s a valuation that’s nearly identical to Riverstone’s price-to-earnings (PE) ratio of 15.0.

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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.