Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Asia’s leading multi-asset exchange

SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Equity Bottom-Up

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<ul>
<li>
SGX lists three rubber glove plays – Top Glove Corp, Riverstone Holdings and UG Healthcare Corp. 
	 </li>
	<li>
Global demand for gloves is expected to increase as countries step up efforts to contain the spread of COVID-19. The Malaysian Rubber Glove Manufacturers Association (MARGMA) forecasts global rubber glove demand to increase 11% to 330 billion pieces in 2020. 
	 </li>
	<li>Due to the exponential increase in glove demand, the three rubber glove makers reported stellar results for their respective financial periods, with earnings surging as much as five-fold. The trio are also planning production capacity increases to alleviate the current supply crunch.</li>
</ul>
 

SGX lists three rubber glove plays – Top Glove Corp, Riverstone Holdings and UG Healthcare Corp. <a href="http://www.topglove.com/">Top Glove</a>: The world’s largest manufacturer of gloves is primary-listed on the Bursa Malaysia, with a secondary listing on SGX. It produces 78.7 billion gloves annually for more than 2,000 customers worldwide and exports to more than 195 countries. Meanwhile Top Glove Corp Bhd has moved from being outside the top 120 Asia Pacific Healthcare stocks by market value to within the top 30, in addition to now ranking as ASEAN’s biggest healthcare stock by market value. <a href="http://www.riverstone.com.my/">Riverstone</a>: With an annual production capacity of about 9.0 billion gloves, it makes premium nitrile gloves used in the healthcare industry, as well as nitrile and natural rubber clean room gloves. <a href="http://www.ughealthcarecorporation.com/">UG Healthcare</a>: Manufactures and sells disposable gloves under its proprietary “Unigloves” brand through an established global downstream distribution network. It also distributes other medical disposables, such as surgical gloves, vinyl and cleanroom disposable gloves, and face masks. Robust Industry Prospects 
Global demand for gloves is expected to increase as countries step up efforts to contain the spread of COVID-19. The <a href="https://www.margma.com.my/">Malaysian Rubber Glove Manufacturers Association</a> (MARGMA) forecasts global rubber glove demand to increase 11% to 330 billion pieces this year, with 67% of the demand set to be fulfilled by local glove makers, according to local media reports. Top Glove Corporation (3Q ended 31 May 2020)

<ul>
<li>Revenue reached a record of RM1.7 billion, up 42% YoY, while profit before tax increased 413% to RM422 million, and profit after tax jumped 365% to RM350 million</li>
	<li>Monthly sales orders surged 180%, resulting in lead times rising to around 400 days from 40 days</li>
	<li>Following the marked increase in glove demand from virtually every country in the world, the Group’s utilisation rate rose from a pre-COVID level of 85% to above 95% in 3Q FY2020, resulting in greater efficiency and economies of scale</li>
</ul>
<table class="table table-striped"><tbody>
<tr>
<td>
			TOP GLOVE (RM'000)
			</td>
			<td>
			3QFY2020 
			</td>
			<td>
			3QFY2019
			</td>
			<td>
			YoY Chg (%)
			</td>
		</tr>
<tr>
<td>
			Revenue
			</td>
			<td>
			1,688,324
			</td>
			<td>
			1,190,235
			</td>
			<td>
			41.9
			</td>
		</tr>
<tr>
<td>
			Profit from operations
			</td>
			<td>
			429,879
			</td>
			<td>
			104,169
			</td>
			<td>
			312.7
			</td>
		</tr>
<tr>
<td>
			Profit before tax
			</td>
			<td>
			422,020
			</td>
			<td>
			82,239
			</td>
			<td>
			413.2
			</td>
		</tr>
<tr>
<td>
			Profit net of tax
			</td>
			<td>
			350,033
			</td>
			<td>
			75,188
			</td>
			<td>
			365.5
			</td>
		</tr>
</tbody></table>
 Source: Company data Riverstone Holdings (1H ended 30 June 2020)

<ul>
<li>Revenue rose 30.5% YoY to RM626.7 million, following the surge in global demand for products such as healthcare examination gloves, clean room gloves and face masks</li>
	<li>Gross profit jumped 108.4% YoY to RM197.7 million, while attributable net profit increased 119.3% to RM137.5 million</li>
	<li>As a result, blended gross profit margin expanded 11.8 percentage points YoY to 31.6%</li>
</ul>
<table class="table table-striped"><tbody>
<tr>
<td>
			RIVERSTONE (RM mln)
			</td>
			<td>
			1H2020 
			</td>
			<td>
			1H2019 
			</td>
			<td>
			YoY Chg (%)
			</td>
		</tr>
<tr>
<td>
			Revenue
			</td>
			<td>
			626.7
			</td>
			<td>
			480.3
			</td>
			<td>
			30.5
			</td>
		</tr>
<tr>
<td>
			Gross profit
			</td>
			<td>
			197.7
			</td>
			<td>
			94.9
			</td>
			<td>
			108.4
			</td>
		</tr>
<tr>
<td>
			Profit before tax
			</td>
			<td>
			175.2
			</td>
			<td>
			74.2
			</td>
			<td>
			136.3
			</td>
		</tr>
<tr>
<td>
			Net profit
			</td>
			<td>
			137.5
			</td>
			<td>
			62.7
			</td>
			<td>
			119.3
			</td>
		</tr>
</tbody></table>
 Source: Company data

 

UG Healthcare (FY ended 30 June 2020)

<ul>
<li>The Group achieved record revenue of S$144.2 million and net profit of S$13.4 million for the financial year</li>
	<li>This was due to increased volumes of glove products produced and sold, with contribution from new production lines, as well as higher selling prices amidst the COVID-19 outbreak</li>
</ul>
<table class="table table-striped"><tbody>
<tr>
<td>
			UG HEALTHCARE (S$'000)
			</td>
			<td>
			FY2020 
			</td>
			<td>
			FY2019 
			</td>
			<td>
			YoY Chg (%)
			</td>
		</tr>
<tr>
<td>
			Revenue
			</td>
			<td>
			144,209
			</td>
			<td>
			91,712
			</td>
			<td>
			57.2
			</td>
		</tr>
<tr>
<td>
			Gross profit
			</td>
			<td>
			42,519
			</td>
			<td>
			18,716
			</td>
			<td>
			127.2
			</td>
		</tr>
<tr>
<td>
			Profit before tax
			</td>
			<td>
			18,057
			</td>
			<td>
			2,763
			</td>
			<td>
			553.5
			</td>
		</tr>
<tr>
<td>
			Profit net of tax
			</td>
			<td>
			13,402
			</td>
			<td>
			2,507
			</td>
			<td>
			434.6
			</td>
		</tr>
</tbody></table>
 Source: Company data

 

Outlook

Top Glove Corporation

<ul>
<li>Top Glove will continue to expand its capacity to ensure it is well-positioned to fulfil global glove demand, which is expected to grow from a pre-COVID level of 8%-10% per annum to 12%-15% per annum
	<ul>
<li>This is on the back of increased usage in both the medical and non-medical sectors, as well as heightened hygiene awareness</li>
	</ul>
</li>
	<li>Top Glove has earmarked RM3 billion for capex to build 450 new lines, creating new capacity of 60 billion pieces of gloves from CY2020 to CY2026
	<ul>
<li>The Group’s blueprints for expansion up to CY2022 are illustrated in the table below:</li>
	</ul>
</li>
</ul>
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<figure>
 <img src='https://api2.sgx.com/sites/default/files/2020-09/Capture_0.PNG' alt='Factories' />
 </figure>
 <div class='content-caption'>Factories</div>
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<ul>
<li>The Top Glove Innovation Complex (TGIC) at Factory 42 in Banting is the Group’s new manufacturing and research centre
	<ul>
<li>A smart and digitalised manufacturing plant, it leverages Industry 4.0 technology, big data analytics for optimum productivity and process efficiency, aimed at reducing dependency on manual labour for routine/repetitive tasks</li>
		<li>It represents a pivotal shift to Industry 4.0 connecting the Group’s factories together, which all future factories will be modelled after</li>
		<li>Phase 1 of the TGIC is expected to be completed by 2Q CY2022</li>
	</ul>
</li>
	<li>Top Glove expects extremely robust quarters ahead, driven by strong demand growth, high utilisation and additional capacity coming onstream, coupled with a continued focus on innovation, technology, quality and cost efficiency</li>
	<li>With a year's worth of orders in the pipeline, Top Glove is confident of delivering solid results not only for the full FY2020, but for FY2021 as well</li>
	<li>Top Glove is expected to release its FY20 (ending 31 August) results by the end of September, after reporting the Group's 9MFY20 Sales Revenue was RM 4.1 billion, a 14% YoY increase, while Profit After Tax was RM 577.8 million, a 97% YoY increase, which had also exceeded the net profits for the full financial year 2019 by 57%.</li>
	<li>In addition to being ASEAN’s biggest healthcare stock and the largest constituent of the iEdge SG All Healthcare Index, Top Glove also emerged its position as the world’s largest manufacturer of nitrile gloves, in addition to being the world’s largest manufacturer of natural rubber gloves and surgical gloves</li>
</ul>
 Click <a href="https://links.sgx.com/1.0.0/corporate-announcements/ZIIVLYQCTU7U7CB0/TopGlove_3QFY2020_Financial_Results_11062020.pdf">here </a>for the full results statement.

 

Riverstone Holdings  

<ul>
<li>While supported by current industry tailwinds, Riverstone continues to focus on internal initiatives such as adopting automation to improve productivity and reduce reliance on labour</li>
	<li>Its in-house R&amp;D team continues to monitor industry trends closely and develop new products that will allow the Group to venture into untapped markets, such as the food processing, pharmaceutical and surgical glove segments</li>
	<li>For its cleanroom glove business, it continues to build on our reputation as a technological front-runner by delivering highly customised solutions and cutting-edge products to maintain its market-leading position</li>
	<li>Phase 6 of its expansion plan is on track to raise capacity by up to 1.4 billion to a total of 10.4 billion pieces of gloves per annum by 4Q FY2020, and will help to alleviate the current supply crunch
	<ul>
<li>The new Phases 7 to 9 are projected to grow capacity by up to 1.4 billion pieces a year to bring capacity to 14.0-15.0 billion pieces by FY2023</li>
	</ul>
</li>
	<li>Riverstone is positioning itself to capture future growth with the launch of its new three-year expansion plan at a new production site in Taiping</li>
	<li>With these initiatives in place, Riverstone has cultivated a business model that supports earnings resiliency and drives long-term sustainable growth</li>
</ul>
 Click <a href="https://links.sgx.com/1.0.0/corporate-announcements/CLH4HMH5ZMNJAWFN/Riverstone%201HFY2020%20Press%20Release.pdf">here </a>for the full results statement. 

 

UG Healthcare  

<ul>
<li>Since early May, UG Healthcare has been operating at its optimum efficiency of 2.9 billion pieces of gloves per annum</li>
	<li>To cope with the higher demand, the earlier planned additional capacity of 300 million pieces of gloves per annum by end June 2021 will be brought forward to March 2021</li>
	<li>The intended additional capacity will be raised by 200 million pieces per annum to 500 million pieces per annum with the advancements in the design and technology of the production lines</li>
	<li>It is planning to expedite a further expansion in production capacity by another 1.2 billion pieces per annum, which will bring the Group’s installed production capacity to 4.6 billion pieces per annum by end June 2021 or the beginning of 1Q FY22 (end-September 2021)</li>
</ul>
Click <a href="https://links.sgx.com/1.0.0/corporate-announcements/AVQBF0S5EVGA4X49/UG%20Healthcare_Annt_FY2020%20Press%20Release.pdf">here </a>for the full results statement.
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SGX lists three rubber glove plays – Top Glove Corp, Riverstone Holdings and UG Healthcare Corp. 
	 
	
Global demand for gloves is expected to increase as countries step up efforts to contain the spread of COVID-19. The Malaysian Rubber Glove Manufacturers Association (MARGMA) forecasts global rubber glove demand to increase 11% to 330 billion pieces in 2020. 
	 
	Due to the exponential increase in glove demand, the three rubber glove makers reported stellar results for their respective financial periods, with earnings surging as much as five-fold. The trio are also planning production capacity increases to alleviate the current supply crunch.

 

SGX lists three rubber glove plays – Top Glove Corp, Riverstone Holdings and UG Healthcare Corp.  Top Glove: The world’s largest manufacturer of gloves is primary-listed on the Bursa Malaysia, with a secondary listing on SGX. It produces 78.7 billion gloves annually for more than 2,000 customers worldwide and exports to more than 195 countries. Meanwhile Top Glove Corp Bhd has moved from being outside the top 120 Asia Pacific Healthcare stocks by market value to within the top 30, in addition to now ranking as ASEAN’s biggest healthcare stock by market value.  Riverstone: With an annual production capacity of about 9.0 billion gloves, it makes premium nitrile gloves used in the healthcare industry, as well as nitrile and natural rubber clean room gloves.  UG Healthcare: Manufactures and sells disposable gloves under its proprietary “Unigloves” brand through an established global downstream distribution network. It also distributes other medical disposables, such as surgical gloves, vinyl and cleanroom disposable gloves, and face masks.  Robust Industry Prospects   
Global demand for gloves is expected to increase as countries step up efforts to contain the spread of COVID-19. The Malaysian Rubber Glove Manufacturers Association (MARGMA) forecasts global rubber glove demand to increase 11% to 330 billion pieces this year, with 67% of the demand set to be fulfilled by local glove makers, according to local media reports.  Top Glove Corporation (3Q ended 31 May 2020)


Revenue reached a record of RM1.7 billion, up 42% YoY, while profit before tax increased 413% to RM422 million, and profit after tax jumped 365% to RM350 million
	Monthly sales orders surged 180%, resulting in lead times rising to around 400 days from 40 days
	Following the marked increase in glove demand from virtually every country in the world, the Group’s utilisation rate rose from a pre-COVID level of 85% to above 95% in 3Q FY2020, resulting in greater efficiency and economies of scale




			TOP GLOVE (RM'000)
			
			
			3QFY2020 
			
			
			3QFY2019
			
			
			YoY Chg (%)
			
		


			Revenue
			
			
			1,688,324
			
			
			1,190,235
			
			
			41.9
			
		


			Profit from operations
			
			
			429,879
			
			
			104,169
			
			
			312.7
			
		


			Profit before tax
			
			
			422,020
			
			
			82,239
			
			
			413.2
			
		


			Profit net of tax
			
			
			350,033
			
			
			75,188
			
			
			365.5
			
		

 Source: Company data   Riverstone Holdings (1H ended 30 June 2020)


Revenue rose 30.5% YoY to RM626.7 million, following the surge in global demand for products such as healthcare examination gloves, clean room gloves and face masks
	Gross profit jumped 108.4% YoY to RM197.7 million, while attributable net profit increased 119.3% to RM137.5 million
	As a result, blended gross profit margin expanded 11.8 percentage points YoY to 31.6%




			RIVERSTONE (RM mln)
			
			
			1H2020 
			
			
			1H2019 
			
			
			YoY Chg (%)
			
		


			Revenue
			
			
			626.7
			
			
			480.3
			
			
			30.5
			
		


			Gross profit
			
			
			197.7
			
			
			94.9
			
			
			108.4
			
		


			Profit before tax
			
			
			175.2
			
			
			74.2
			
			
			136.3
			
		


			Net profit
			
			
			137.5
			
			
			62.7
			
			
			119.3
			
		

 Source: Company data

 

UG Healthcare (FY ended 30 June 2020)


The Group achieved record revenue of S$144.2 million and net profit of S$13.4 million for the financial year
	This was due to increased volumes of glove products produced and sold, with contribution from new production lines, as well as higher selling prices amidst the COVID-19 outbreak




			UG HEALTHCARE (S$'000)
			
			
			FY2020 
			
			
			FY2019 
			
			
			YoY Chg (%)
			
		


			Revenue
			
			
			144,209
			
			
			91,712
			
			
			57.2
			
		


			Gross profit
			
			
			42,519
			
			
			18,716
			
			
			127.2
			
		


			Profit before tax
			
			
			18,057
			
			
			2,763
			
			
			553.5
			
		


			Profit net of tax
			
			
			13,402
			
			
			2,507
			
			
			434.6
			
		

 Source: Company data

 

Outlook

Top Glove Corporation


Top Glove will continue to expand its capacity to ensure it is well-positioned to fulfil global glove demand, which is expected to grow from a pre-COVID level of 8%-10% per annum to 12%-15% per annum
	
This is on the back of increased usage in both the medical and non-medical sectors, as well as heightened hygiene awareness
	

	Top Glove has earmarked RM3 billion for capex to build 450 new lines, creating new capacity of 60 billion pieces of gloves from CY2020 to CY2026
	
The Group’s blueprints for expansion up to CY2022 are illustrated in the table below:
	





      
    
    Factories



The Top Glove Innovation Complex (TGIC) at Factory 42 in Banting is the Group’s new manufacturing and research centre
	
A smart and digitalised manufacturing plant, it leverages Industry 4.0 technology, big data analytics for optimum productivity and process efficiency, aimed at reducing dependency on manual labour for routine/repetitive tasks
		It represents a pivotal shift to Industry 4.0 connecting the Group’s factories together, which all future factories will be modelled after
		Phase 1 of the TGIC is expected to be completed by 2Q CY2022
	

	Top Glove expects extremely robust quarters ahead, driven by strong demand growth, high utilisation and additional capacity coming onstream, coupled with a continued focus on innovation, technology, quality and cost efficiency
	With a year's worth of orders in the pipeline, Top Glove is confident of delivering solid results not only for the full FY2020, but for FY2021 as well
	Top Glove is expected to release its FY20 (ending 31 August) results by the end of September, after reporting the Group's 9MFY20 Sales Revenue was RM 4.1 billion, a 14% YoY increase, while Profit After Tax was RM 577.8 million, a 97% YoY increase, which had also exceeded the net profits for the full financial year 2019 by 57%.
	In addition to being ASEAN’s biggest healthcare stock and the largest constituent of the iEdge SG All Healthcare Index, Top Glove also emerged its position as the world’s largest manufacturer of nitrile gloves, in addition to being the world’s largest manufacturer of natural rubber gloves and surgical gloves

 Click here for the full results statement.

 

Riverstone Holdings  


While supported by current industry tailwinds, Riverstone continues to focus on internal initiatives such as adopting automation to improve productivity and reduce reliance on labour
	Its in-house R&amp;D team continues to monitor industry trends closely and develop new products that will allow the Group to venture into untapped markets, such as the food processing, pharmaceutical and surgical glove segments
	For its cleanroom glove business, it continues to build on our reputation as a technological front-runner by delivering highly customised solutions and cutting-edge products to maintain its market-leading position
	Phase 6 of its expansion plan is on track to raise capacity by up to 1.4 billion to a total of 10.4 billion pieces of gloves per annum by 4Q FY2020, and will help to alleviate the current supply crunch
	
The new Phases 7 to 9 are projected to grow capacity by up to 1.4 billion pieces a year to bring capacity to 14.0-15.0 billion pieces by FY2023
	

	Riverstone is positioning itself to capture future growth with the launch of its new three-year expansion plan at a new production site in Taiping
	With these initiatives in place, Riverstone has cultivated a business model that supports earnings resiliency and drives long-term sustainable growth

 Click here for the full results statement. 

 

UG Healthcare  


Since early May, UG Healthcare has been operating at its optimum efficiency of 2.9 billion pieces of gloves per annum
	To cope with the higher demand, the earlier planned additional capacity of 300 million pieces of gloves per annum by end June 2021 will be brought forward to March 2021
	The intended additional capacity will be raised by 200 million pieces per annum to 500 million pieces per annum with the advancements in the design and technology of the production lines
	It is planning to expedite a further expansion in production capacity by another 1.2 billion pieces per annum, which will bring the Group’s installed production capacity to 4.6 billion pieces per annum by end June 2021 or the beginning of 1Q FY22 (end-September 2021)

Click here for the full results statement.



Trio of Rubber Glove Makers Report Earnings Surge 