Malaysia Gloves Maker - UOB Kay Hian 2024-05-15: Plot Twist From Escalating US-China Trade Tension

• The precipitous tariff hike announced by US authorities on China’s medical-grade gloves beginning 2026 is poised to revitalise investors’ sentiment on the Malaysian glove sector.
• While the sector’s recovery plot continues to thicken beyond post-pandemic eclipsing earnings and demand moderation, we anticipate domestic glovemakers to progressively reclaim market share from China, sustaining concrete ASP trajectories and future margin upticks.
• - Read this at SGinvestors.io -

US increasing tariff on China medical-grade gloves in 2026 amid escalating trade tension.

• Yesterday, US President Joe Biden unveiled steep tariff increases on an array of Chinese imports under Section 301 of the Trade Act of 1974. This includes a higher tariff of 25% (from current 7.5%) on China’s rubber medical and surgical gloves’ exports into the US beginning 2026.

Structural change likely altering nitrile gloves’ demand landscapes.

• - Read this at SGinvestors.io -
• While China players predominantly produces PVC vinyl and nitrile gloves (>85% of total sales in 2023), we see meaningful nitrile gloves demand flowing back to Malaysian manufacturers after the tariff hike is imposed.

US tariffs hike a cherry on the cake.

• Read more at SGinvestors.io.

Jack Goh UOB Kay Hian Research | https://research.uobkayhian.com/ 2024-05-15

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