$TOPGLOV / 7113 (TOP GLOVE CORPORATION BHD) lost the test of time

@eddilee11 just like @andy721, TOPGLOV did worse than my personal bearish expectation. As much as many thought the worst was over for TOPGLOV when CBP ban was lifted, fact from this quarter shows that has not been the case for the company. Sales volume remained low and ASP dip faster than expected, for the company. CBP ban uplift may have a laggard impact, but from my channel checks - TOPGLOV had been and still is one which is selling lower than everyone else.

@takanoamin as much as I do not like to comment on this matter, but it's increasingly visible that the 2 points you mentioned had hurt them badly. TOPGLOV's excessive buyback program at high prices now look a really bad move from the management from all angles. The 1.2c dividend was at 50% payout but due to lower profit, this is below expectation as well..

@terence775 @andy721 @v147 unfortunately, I believe you guys may be right - when it comes to "balance sheet strength", TOPGLOV has the lowest net cash per market cap ratio vs its peers. One of the reason is this stems from them paying generous dividends earlier on. Whilst it's not wrong, but unlike their peers who paid less generously, it can be marked as the management was alone in reading the normalising trend "wrongly". This could also be supported by TOPGLOV coming out now and mentioning about being "cautious and defer its expansion plans to be in line with market trends and the demand supply situation." I used to be curious on why RIVERSTONE is not being more aggressive on their expansion plan, now I understand that they're being REALISTIC and do not want to "spook" the market which undoubtedly Topglov and (Chinese makers) to some extent had done.

Net Cash to Market Cap:
TopGlov: 8%
Harta: 26%
Kossan: 55%
Riverstone: 64%
Supermax: 83%

*Silver Lining* - @jimboy178 Yes the speed of ASP normalisation is really unexpected. This largely is due to customer spending pattern, due to overstocking, as well as due to TOPGLOV selling at lower prices. But the "disappearance" of demand will soon come back, imo. TOPGLOV will gradually regain its exports to the U.S, customers are expected to gradually replenish their stocks from normalising ASPs, means sales volume will improve slowly over time.

From what I gather as well, ASP had found bottom at USD23 few weeks ago and now settling around USD30.

I personally had cut my TOPGLOV position at around -50% loss year to date. Whilst my exposure in TOPGLOV had became small vs overall port, this was still painful and a lesson to take in.

All in all, whilst I still see downside for TOPGLOV from the points mentioned earlier, I see some other glovemaker stock prices are bottoming. I remain a believer in the long term prospects of the glovemakers, especially with $HARTA / 5168 (HARTALEGA HOLDINGS BERHAD) and RIVERSTONE $SGX-AP4 (even $KOSSAN / 7153 (KOSSAN RUBBER INDUSTRIES BERHAD)) and will look to replenish my position in this sector to 10% of overall portfolio in 2022 in due course. Buy when others are selling.

For TOPGLOV, I believe long term prospects of the company (2 years plus) as a business (not share price) is still intact. I believe they will be the one that can come out of this episode with the steepest learning curve. TOPGLOV will still remain the top / global leader in glovemaker and command one of the lowest cost producer of glove.

Sharing my journey, Rondy.