According to the news, 28 out of 46 Top Glove factories will cease operations in stages. That is 60% of topglove operations.
Question remains:
What is going to happen to Topglove share during this short period?
Some has speculated that the share price of 7.35 to fall as many of their production lines will not be operating for a certain period of time. This could result in a loss of revenue and profit for the time being.
There is a chance that conservative investors from Topglove may start jumping boat to other glove companies such as SuperMax (8.16), Rubberex (2.03), Hartalega (14.46), Kossan (6.30) & Careplus (2.78) for a safe and slow gain growth.
There will also be investors from Topglove that will take this chance to play a little aggressively by investing into new glove companies such as AT (0.17), Solcan (0.29), Mah Sing (0.89), Luster (0.18) and others for a more risky and faster gain after these new glove companies start to produce gloves.
Many topglove current investors are very confident that the share price will not drop too heavily and will come back stronger than ever. On the other hand, other potential investors has already started eyeing on Topglove share price to fall so that they can buy at its lower share price.
In my opinion, it could take a while for Topglove to recover their share price to 7.35 again after the fall tomorrow. Their shares are most likely to rebound after they manage to solve their workers hostel situation and their workers health issues.
Reference:
https://www.freemalaysiatoday.com/category/nation/2020/11/23/28-top-glove-factories-in-klang-to-close-in-stages/
