- After a disappointing quarter, we expect Top Glove (SGX:BVA)’s turnaround to require a longer time owing to subdued plant utilisation rate as well as lower ASP profile than its peers. Maintain NEUTRAL with new MYR0.83 target price from MYR0.93, 4% upside.
- - Read this at SGinvestors.io -
ASP.
- Industry-blended ASPs have held up at US$20 per 1,000 pieces from US$19-20 previously (although nitrile ASP was relatively lower, at US$17-18 vs latex glove at US$20).
- According to our channel checks, Chinese glove makers’ ASPs are expected to increase to US$16-17 from US$15-16. The continued narrowing of the ASP gap means the prolonged price war is approaching its tail-end – allowing Malaysian manufacturers to compete via product quality rather than price.
Demand.
- - Read this at SGinvestors.io -
- Meanwhile, China glove exports contracted 15% m-o-m in Feb, following a 4% m-o-m growth in Jan.
- We maintain our 2024 global glove demand growth of 7%, premised on the recovery of glove restocking activities in 2H24.
Supply.
- Read more at SGinvestors.io.
