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Malaysia's Top Glove applies to list in Hong Kong

Glove maker confident demand will remain strong even after pandemic

After explosive growth in orders in 2020, Malaysia's Top Glove is looking to raise money for further expansion in a Hong Kong share listing.   © Reuters

KUALA LUMPUR -- Malaysia's biggest rubber glove maker has applied to list on the Hong Kong Stock Exchange despite signs that the rollout of COVID-19 vaccines may temper investor appetite for medical glove stocks.

Hong Kong would be the third market to host the company's shares and an additional primary listing would give it the chance to raise more money on one of Asia's most liquid stock exchanges. Top Glove also has a primary listing in Malaysia and those shares were also listed in a secondary offering in Singapore.

Top Glove Executive Chairman Lim Wee Chai in a statement said an additional primary listing in Hong Kong would enable the company to "raise capital for business growth, geographic expansion and strategic investments and acquisitions."

The company did not reveal a target amount it hopes to raise or a timeline for the listing.

"We aim to increase our production capacity, upgrade our facilities, and invest in new technologies to improve our offering and response time for our customers around the world, which will help to further strengthen our position as the world's largest manufacturer of gloves and to enhance stakeholders' long-term value," he said.

Managing Director Lee Kim Meow said proceeds from the listing would enable technological advancements in glove production that would increase quality, efficiency and innovation.

"An additional primary listing can provide the group with an expanded platform to finance and accelerate these initiatives," he said.

The proposed Hong Kong listing is pending approvals from Top Glove's shareholders, Securities Commission Malaysia, the Malaysian stock exchange and the listing committee of the Hong Kong bourse.

China International Capital is the sole sponsor for the proposed listing, while Hong Leong Investment Bank is the principal adviser.

The move comes, however, as investors have begun to cool on glove stocks, due in large part to the mass distribution of COVID-19 vaccines globally.

Top Glove previously told Nikkei Asia that share price movements and investor decisions are external factors outside of its control.

"On our part, Top Glove will continue to focus on managing our business well, so we are able to consistently deliver the strong and healthy results our stakeholders have come to expect from us," the company said.

Top Glove is also facing allegations that it has abused foreign workers in its rush to meet the explosion in orders caused by the pandemic. Australia, the U.S. and Denmark have gone as far as discussing import restrictions over the issue. In July last year, the U.S. banned imports from two subsidiaries of Top Glove over concerns of forced labor.

Top Glove told Nikkei that it expects demand for medical gloves will remain intact even with the rollout of vaccines because immunization procedures also require medical gloves and because hygienic awareness will remain high even after the pandemic.

The company is confident that demand will not fall to pre-pandemic levels.

"Pre-pandemic, global glove demand was already growing about 10% and is expected to continue to grow steadily driven by strong market fundamentals across all geographies," it said.

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