Top Glove’s listing on HKEX taking shape — Analysts
KUALA LUMPUR: Analysts laud Top Glove Corporation Bhd (Top Glove) for its application to be listed on the main board of the Stock Exchange of Hong Kong (HKEX), proposing the issuance of up to 1.495 billion new shares which would raise up to HK$14.95 billion or approximately RM7.8 billion. This would represent up to 18.65 per cent of the total issued Top Glove shares.
Hong Leong Investment Bank Bhd said post-listing on HKEX, Top Glove will maintain its existing primary listing on Bursa Malaysia and secondary listing on Singapore Exchange Securities Trading Ltd (SGX-ST).
Top Glove shared that the funds will mainly be used to fund capacity expansion. MIDF Amanah Investment Bank Bhhd (MIDF Research) saw that the possible issuance of up to 1.5 billion new shares for a global offering of new shares, may includes an additional 195.0 million new shares which may be issued under the over-allotment option.
“The estimated fund to be raised if the over-allotment option is not exercised is RM6.8 billion. The new shares will be issued to the Hong Kong public as well as qualified institutional buyers in the US,” it said.
The fund raised from Top Glove’s HKEX listing will be utilised for production capacity expansion, geographical expansion and the upgrade of existing facilities. Out of the total fund raised, 60 per cent or RM4.6 billion is allocated for the expansion of production capacity and development of a data-driven manufacturing system over the next 36 months.
This is followed by 10 per cent for research and development, another 10 per cent for the upgrade of various software systems and acquire information technology and to acquire information technology such as artificial intelligence and big data, 10 per cent for potential merger and acquisition as well as five per cent for environmental, social and corporate governance initiatives and another five per cent for working capital and general corporate purposes. The funds raised will be utilised for eight new factories to start the production of mainly nitrile gloves by the end of 2024.