- The easing of US-China trade tension is expected to pose a threat to Top Glove’s earnings growth in view of a risk of China taking market share in the US. Downgrade to SELL from BUY, with a lower Top Glove's target price of MYR0.75 from MYR1.06.
- - Read this at SGinvestors.io -
- We raised our risk premium assumptions to reflect a higher risk in association with the easing of the trade tension.
Narrowing ASP gap.
- - Read this at SGinvestors.io -
- Based on China latest ASP of US$15/1,000 pieces, the post-tariff price would be US$27 vs Malaysia ex-tariff ASP of US$23 (US$21 + 10%), with the 90-day grace period lasting until 8 July before the 24% reciprocal tariffs take effect.
- All in, the ASP gap between Malaysian and Chinese players is set to narrow to just US$4 from US$21 previously.
- For 2026, China ASPs could reach as high as US$31.50, taking into effect the 100% tariffs imposed under former US President Joseph Biden, i.e. Malaysia could remain competitive in 2026 should the 100% tariffs remain in place.
Potential impact.
- Read more at SGinvestors.io.
