Malaysia Glove Makers - UOB Kay Hian 2024-06-14: Blooming In Spring

Malaysia Glove Makers - Blooming In Spring

Top Glove (SGX:BVA) | SGinvestors.ioTop Glove (SGX:BVA)
  • The Malaysian glove sector is officially out of the woods with anticipation of sequential earnings growth coming into fruition throughout 2024. We have also observed a feasible trend of improving operating statistics from the past few quarters.
  • With this and the US’ precipitous tariff hike on China’s medical-grade gloves beginning 2026, we re-affirm our optimism that potential valuation re-rating may continue to catalyse the sector’s positive share price trajectories.
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A glimpse of 1Q24 results.

  • Malaysian glove stocks under our coverage delivered mixed set of results in 1Q24. Kossan's results were within expectations, while Hartalega and Top Glove (SGX:BVA)'s missed our expectations. This was mainly due to delayed cost past through and ASP-cost mismatch in the quarter, as higher input costs are not timely reflected in ASP revisions.
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Operating matrixes turning over a new leaf.

  • We anticipate the domestic glove companies under our coverage to deliver sequentially better results in the upcoming quarters throughout 2024.
  • Examining Top Glove, Hartalega and Kossan's recent operating statistics, we observed that earlier ASP declines have come to a halt and are gradually trending up, while volume sales have seen a steep q-o-q improvement.
  • Moreover, input cost moderation should lift overall operating margin as COGS falls on lower natural gas tariff and raw material costs.

Tailwind from US-China escalating trade tension is catalysing sector's valuation re-rating.

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Above is the excerpt from report by UOB Kay Hian Research.
Clients of UOB Kay Hian may be the first to access the full report in PDF @

Jack Goh UOB Kay Hian Research | 2024-06-14

More views on outlook of manufacturing / technology sector:
Analyst Reports on Singapore Manufacturing & Technology Sector

Read also UOB's most recent report:
2024-06-20 Top Glove - 3QFY24 Turning Over A New Leaf .

Previous report by UOB:
2024-03-21 Top Glove - A Setback In 2QFY24 With Silver Linings .

Price targets by other brokers at Top Glove Target Prices.

Listing of research reports at Top Glove Analyst Reports.

Relevant links:
Top Glove Share Price History,
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Top Glove Dividends & Corporate Actions,
Top Glove News Articles


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