Glove companies have been one of the rare sectors that have witnessed phenomenal growth during this pandemic.
The sudden surge in infected people has prompted governments around the world to order large supplies of gloves and personal protective equipment.
Glove companies have seen their share prices surged significantly since the start of the outbreak.
Top Glove Corporation Berhad (SGX: BVA), the largest glove manufacturer in the world, was trading at just S$0.51 at the beginning of 2020.
The glove maker’s share price has now more than tripled to S$1.71.
The group recently reported record sales and soaring profits for its fiscal 2021 second quarter.
Revenue more than quadrupled year on year to RM 5.4 billion while net profit after tax jumped nearly 25-fold to RM 2.9 billion.
Investors need to be wary, though.
The situation may not always remain rosy for the glove producer.
Here are three major risks for Top Glove that investors need to watch....