VIP Gloves directors validate nitrile glove strategy with on-market purchases

VIP Gloves Ltd (ASX:VIP) directors have shown their support for the company’s growing nitrile gloves business and encouraging future outlook by purchasing shares on-market. Leading the way is executive director WM Chen who acquired 1.74 million shares on December 16 at 7.7 cents for a direct interest in an open trading window period. The acquisition takes the total number of shares held in that interest to almost 48.761 million. It followed Chen’s earlier on-market acquisition of 870,000 shares at 7.5 cents per share. Other director purchases Also validating the company’s glove production expansion with on-market purchases this week are non-executive directors (David) Chee Chong Low and (Peter) Yee Ming Ng. On December 14 David Low acquired 80,000 shares at 7.5 cents in a direct interest, increasing the number of securities held in that interest to 260,000. Peter Ng acquired 48,600 shares at 7.2c per share on December 15 in a direct interest and this marked his first purchase of ordinary shares. Positive fundamentals VIP Gloves is highly encouraged by market trends in the glove industry supported by increasing interest due to COVID-19 and which are also expected to remain strong in post-COVID economies with increased emphasis on health and PPE. VIP’s sales order book for nitrile gloves has increased and is currently full for delivery up to the end of 2021. To fulfil existing sales orders and to enable the company to commit to new orders, VIP Gloves is urgently pursuing completion of the installation of new production lines at its Malaysian operations. Progress for the installation of new production lines is progressing well, with lines 5 and 6 targeted to be completed this month and lines 7 and 8 due to be completed by April 2021. WM Chen said: “Our factories are working 24/7 to fulfil the existing orders and new orders are still coming in with higher average selling prices.” Selling prices increase Average selling prices (ASPs) have continued to rise over the last several months due to increased demand. The company anticipates a 50% increase in the ASP for the current quarter ending December 2020, from the US$50 per 1,000 pieces achieved in the July to September 2020 quarter.