Shares in the lightly traded gloves manufacturer VIP Gloves (ASX: VIP) have skyrocketed this morning on news that the Company has such a large backlog of orders that their 24/7 production capacity is fully committed until December 2020.
With their production facilities based in Malaysia and not impacted by the Malaysian Government’s COVID-19 biosecurity measures, VIP Glove’s plan is operating at maximum capacity already to fill orders. The order book represented approximately 100 shipping containers worth of nitrile gloves, with each container holding up to 4 million gloves.
As the coronavirus pandemic has led to heightened health standards around the world, gloves have played a major role around the world in preventing the transmission of the virus which can survive on surfaces for up to 14 days, and be transmitted via touch.
News of the order book backlog sent shares in VIP up to $0.30 per share in early morning trade, a rise of 757% on their previous day’s close of $0.035.
It continued a trend amongst small cap businesses which have seen instant spikes in their share prices amidst coronavirus-related news.
Since rebranding as VIP Gloves (previously Voltage IP) in November 2018, the company has seen minimal trading activity on the ASX with their business subsidiaries operating exclusively out of Malaysia – the world’s largest manufacturer of disposable gloves.
For the half-year ending December 31, 2019, VIP Gloves reported revenues of $5.5m for a net loss of $0.95m which was a significant improvement on the year prior corresponding period when the Company reported a net loss of $2.3m.
Alfred Chan is a Business Reporter at The Sentiment specialising in ASX-listed small cap companies, a bloodstock enthusiast and former equities analyst.
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