Malaysian Billionaire Glove Maker Delays Hong Kong Listing As Profit Slumps

Top Glove—controlled by billionaire Lim Wee Chai—has postponed plans to list on the Hong Kong bourse as profits tumbled after prices of rubber gloves moved closer to pre-pandemic levels.

Amid an earnings downturn and with global markets turning increasingly volatile after the Russian invasion of Ukraine, the company moved to postpone its listing in Hong Kong. While Top Glove shares trade in Malaysia and Singapore, a Hong Kong listing would have broadened the company’s shareholder base.

“Due to the changing developments in the industry and the current equity market conditions, we have decided to give ourselves more time to pursue this (listing) exercise in Hong Kong,” the company said in a statement. “We are not in a hurry. Our decision is always for the long-term benefit of the company and our stakeholders.”

While the company benefitted from a surge in demand for rubber gloves in the past two years as the Covid-19 pandemic spread across the globe, its latest results show its top and bottom lines have both come under pressure. Net profit in the second quarter ended February 28 slumped 97% to 87.5 million ringgit ($20.9 million) from the previous year as sales dropped 73% to 1.4 billion ringgit, it said in a statement on Wednesday.

“For the past 2 years, we have been accustomed to delivering exceptional results,” Lee Kim Meow, managing director of Top Glove, said in a statement. “While our second quarter results are not as robust as we would like them to be, this is to be expected as the pandemic recedes and it is part of the business cycle. Having been in the glove business for 31 years, we have seen many such cycles and our experience has prepared us well to go through this one.”

Top Glove said it will “remain cautious and scale back” expansion plans which had aimed to boost its annual production capacity to 188 billion gloves by 2025 from 100 billion currently. “The group will however, continue to monitor the situation closely and stands ready to reinstate expansion plans as required when demand eventually picks up,” it added.

Lee said demand will continue to grow, though it’s unlikely to accelerate to the “unsustainable pace” seen during the pandemic. “This challenging period is temporary,” he added.

Top Glove was founded by Lim and his wife, Tong Siew Bee, in 1991. Lim, whose parents are rubber plantation owners and traders, also holds a stake in property developer Tropicana and sits on its board. His real-time net worth has fallen to $1.6 billion from $3.5 billion last April when the World’s Billionaires List was last published, Forbes’ data show.