Malaysia Glove Makers - Maybank Research 2024-09-16: Christmas Comes Earlier

Malaysia Glove Makers - Christmas Comes Earlier

Published:
Top Glove (SGX:BVA) | SGinvestors.ioTop Glove (SGX:BVA)
  • We are pleasantly surprised by US’ final USTR modifications on China tariffs, which will raise tariffs on China-made medical and surgical gloves to 50% by 2025 and 100% by 2026 - well above the 25% proposed in May 2024.

A boost to Malaysia glove makers competitiveness

  • - Read this at SGinvestors.io -
  • Our top BUYs are Hartalega and Kossan Rubber. We Upgrade Top Glove to a tactical BUY.

USTR finalises action on China tariffs

  • The United States Trade Representative (USTR) has unexpectedly accelerated and increased tariffs on China-made medical and surgical gloves. The tariff will rise to 50% by 2025 and 100% by 2026, exceeding the 25% by 2026 proposed in May 2024 (vs. current tariff of 7.5%). For e.g., China glove ASP is currently at US$17-18/k pcs.
  • - Read this at SGinvestors.io -

An unexpected positive development

  • We expect this latest development to make Malaysia gloves more attractive in the US market. This market has been important for Malaysia glove makers (Top Glove: 15% of sales, Hartalega: 50%), which have been losing market share to their Chinese counterparts since 2021 due to intense price competition.
  • While there is a risk that China glove makers may shift their focus to the European market (Top Glove: 35% of sales, Hartalega: 25%), we believe Malaysia glove makers could offset the loss of their market share in Europe with stronger sales in the US.

Short-term positive but long term remains uncertain

  • Read more at SGinvestors.io.




Above is the excerpt from report by Maybank Research.
Clients of Maybank Securities may be the first to access the full report in PDF @ https://www.maybanktrade.com.sg/.




Wong Wei Sum CFA Maybank Research | https://www.maybank-ke.com.sg/ 2024-09-16



Read also Maybank's most recent report:
2024-11-24 Top Glove - Strategic Joint Venture Backed By Ready Order.

Previous report by Maybank:
2024-07-29 Malaysia Gloves Sector - Intensifying Competition; Downgrade To Tactical Positive.

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,
Top Glove Announcements,
Top Glove Dividends & Corporate Actions,
Top Glove News Articles





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