3 Things Investors Should Know About Top Glove’s Sales

The Malaysia-based Top Glove (SGX: BVA)(KLSE: 7113.KL) is the largest rubber gloves maker in the world with a market share of around 25%. It is dual-listed in both Singapore (since June 2016) and Malaysia (since March 2001).

Since its IPO in Bursa Malaysia, Top Glove has been a huge winner, clocking up a total return (including reinvested dividends) of over 4,000%.

In this article, let’s look at three important things about the company’s sales.

Current product mix

The chart below shows Top Glove’s current product mix by volume: Top Glove product mix sales quantity chart
Source: Top Glove Investor Presentation

We can see that Top Glove’s overall product portfolio by volume is quite reasonably balanced between latex (52%), nitrile (36%), and other types of gloves (12%).

Historical product mix trend

Here’s a chart showing how Top Glove’s product-mix has changed over time over the past few years:

Top Glove product mix over the years chart
Source: Top Glove Investor Presentation

There are two obvious trends. Firstly, Nitrile gloves has grown tremendously in significance for Top Gloves. Secondly, latex gloves’ share of the company’s sales mix has declined from 81% in FY2011 (fiscal year ended 31 August 2011) to 52% in the first half of FY2017.

Combined, both trends result in a more balanced portfolio of latex and nitrile gloves for the company.

Future expansion plan

The slide below shows Top Glove’s plans in the near future to expand its production capacity:

Top Glove expansion plan
Source: Top Glove Investor Presentation

The company has plans to increase its current production capacity by 25%, from 48 billion gloves per year to 60 billion.

Moreover, given that all of the new capacity will be for the production of nitrile gloves, we can expect this product category to account for around half of the company’s total production capacity by end-2018.

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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 contributor Lawrence Nga doesn’t own shares in any companies mentioned.