- While the Malaysian gloves sector charted an impressive turnaround in 2024 after the COVID-19 lows as expected, risk-reward appears less appealing currently as valuations are trading close to the historical mean based on 2025’s full earnings recovery.
- Downgrade to MARKET WEIGHT.
2025 will be a year of delivery.
- - Read this at SGinvestors.io -
- depletion of excess inventory,
- margin expansion on better efficiency and ramped-up capacity,
- moderating input costs, and
- the US’ revised tariffs on China gloves.
- Against the backdrop of these positives, we reiterate our view that the sector’s earnings are on the cusp of a progressive earnings recovery throughout 2025.
Nevertheless, rationalisation of overhyped market expectations anticipated.
- - Read this at SGinvestors.io -
- We opine that the market may have built up expectations of operating matrixes such as utilisation rate and profitability margin returning to 2019’s level within the upcoming 1-2 quarters, with such optimism fairly reflected in the aggressive share price uptick seen throughout 2024.
US’ higher tariffs on China medical-grade gloves officially began in January.
- Read more at SGinvestors.io.
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 @ https://www.utrade.com.sg/.
Jack Goh UOB Kay Hian Research | https://research.uobkayhian.com/ 2025-01-09
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.
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Top Glove Announcements,
Top Glove Dividend Payout Dates & Corporate Actions,
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