Rubber Products - RHB Invest 2024-06-18: Growth Set To Accelerate; Still OVERWEIGHT

Rubber Products - Growth Set To Accelerate; Still OVERWEIGHT

Riverstone (SGX:AP4) | SGinvestors.ioRiverstone (SGX:AP4) TOP GLOVE CORPORATION BHD (SGX:BVA)
  • Maintain OVERWEIGHT. Top Picks: Riverstone (SGX:AP4), Hartalega, and Kossan Rubber.
  • Operating dynamics remain in favour of the glove manufacturers on the back of better demand visibility, supply rationalisation, and stabilisation of ASP. We learnt that the current production run rate has improved tremendously as order volumes in 2Q24 are expected to be higher vs 1Q24.
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  • Industry-blended ASPs are currently hovering at US$20-21/1,000 pieces from US$20 in 1Q24. According to our channel checks, Chinese glove makers’ ASPs are now ranging between US$17-18 from US$15-16 in 1Q24.
  • We think the continued narrowing of the ASP gap would mean the prolonged price war is approaching its tail-end, which ultimately allows Malaysian manufacturers to compete via product quality rather than price.


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  • All in, we maintain our 2024 global glove demand growth at 22% premised on the recovery of glove restocking activities in 2H24.
  • That said, Malaysian Rubber Glove Manufacturers Association or Margma expects global glove demand to chart a CAGR growth of 10% to 450bn pieces from 2023-2027.


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Oong Chun Sung RHB Securities Research | Singapore Research RHB Invest | 2024-06-18

More views on outlook of manufacturing / technology sector:
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Read also RHB's most recent report:
2024-05-13 Riverstone - Let The Good Times Roll; Keep BUY.

Previous report by RHB:
2024-05-10 Riverstone - Off To A Strong Start; Maintain BUY.

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