This is in relation to Topglov’s wholly-owned subsidiary’s Top
Care Sdn Bhd (“Top Care”)’s purchase of the 270,850,119 shares in Aspion Sdn
Bhd (“Aspion”) from Adventa Capital for a fixed amount of RM1.37 billion in
January this year.
Topglov claimed that Adventa & its sponsors have made
misrepresentations which resulted in Topglov & Top Care entering into the
agreement to purchase Aspion. Topglov and Top care are claiming for a sum of
not less than RM714,862,759 arising from a conspiracy to defraud them.
The loss of RM714.86 million for Topglov, with outstanding issue shares of 1.28 billion units, translates to a loss of 56 sen per share. Its NTA will be reduced from RM1.78 to RM1.22. If we exclude the impact of this one-off exceptional loss, Topglov (now at RM9.00 @9.45am) is trading at a PER of 26 times (based on last 4 quarters' EPS of 34.3sen). That's fairly attractive for a rubber glove stock. Even Supermx is now trading at a PER of 28 times (based on price of RM4.50 & last 4 quarters' EPS of 15.9 sen).
Chartwise, Topglov's immediate support is at the horizontal line at RM8.00. next support will be at the tentative uptrend line, SS at RM6.50.
Chart: Topglov's monthly chart as at july 9, 2018 (Source: Shareinvestor,com)
Based on good financial performance & attractive valuation, Topglov is a good BUY.
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