Dear fellow readers,
Once
again, these writings are just my humble highlights (not
recommendation), feel free to have some intellectual discourse on this.
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__________________________________________________________
Dear
all, I have just listened in to the Clarification conference by Top
Glove with respective fund managers and research houses. Some takeaway
for your knowledge :
1.
The issue arises primarily due to the recruitment fees paid to agency
issues prior January 2019 where activist of NGOs are championing for
companies like Top Glove to reimburse workers as part of their human
rights argument. This is an old issue which was re-highlighted due to
the UK Channel 4 report. Top Glove have played an active part in
resolving such practice and is currently prepared to set aside RM 20-50
Million for this matter.
2.
Under both subsidiaries which was placed on US Customs Detention list,
they contribute 12.5% of total Top Glove revenue / orders and 50% of the
25% (total Revenue from US Markets)
3.
The management believes this matter can be resolved in 2 weeks as they
have many years of experience dealing with authorities in the US, they
have a US office which was set up for over 20+ years. In addition, they
hired the consultancy firm which assisted WRP in resolving this matter.
4.
The management said generally workers are very happy working in Top
Glove and they are long waiting list for foreign workers application
abroad as the company takes care of the welfare of the workers. 104
hours of OT limit is strictly followed by the management to prevent any
misunderstanding of forced slavery.
5.
In the event the gloves are not able to be cleared, the management is
not worried of taking the gloves back or diverting to other countries as
the demand is huge due to this unfortunate pandemic. It is also hard
for the existing customers who ordered to place fresh orders elsewhere
by cancelling this order pending their resolution. 1 month wait is
nothing compared to the lead time and spot rate a company has to take to
make fresh order. If the customer insist on cancelling, Top Glove will
return their deposit as gesture of goodwill.
6.
Lastly the management is doing everything they can to resolve this
matter. They believed the huge shortage in gloves in US particularly
will require all parties to work together in resolving this in order to
address the needs and demand of the US.
7.
In terms of share price impact, the management cited Aspion where the
legal tussle resulted in the share price plummeting 20% before finally
rebounding to what it is today. They have confidence in the company in
moving forward as well.
_______________________________________________________________
Telegram channel : https://telegram.me/tradeview101
Website / Blog : http://www.tradeview.my/
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Email me to sign up as private exclusive subscriber : tradeview101@gmail.com
Website / Blog : http://www.tradeview.my/
Facebook : https://www.facebook.com/tradeview101/or
Email me to sign up as private exclusive subscriber : tradeview101@gmail.com
Food for thought:
https://klse.i3investor.com/blogs/tradeview/2020-07-16-story-h1510576547-_Tradeview_2020_Update_Top_Glove_US_Customs_Border_Protection_Debacle.jsp
