PhillipCapital has initiated coverage on disposable glove manufacturer UG Healthcare with a “buy” call and a target price of $2.70.

The price is based on a price-to-earnings ratio (P/E ratio) of 15x for FY21e and represents a 40% historical discount to its peers in view of the company’s smaller scale and size, says PhillipCapital head of research Paul Chew in a July 28 report.

Since the Covid-19 outbreak, spot prices for gloves have ballooned five-fold. Order lead times have increased to a year from a month previously.

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