Malaysia Gloves Sector - UOB Kay Hian 2025-06-24: Cyclical Volatility From Episodic Narratives

• Amid geopolitical reshuffling, the US’ reciprocal tariffs, and intensifying China competitions, the Malaysian glove sector rode through a volatile 1H25.
• Despite the year-to-date steep share price correction reflecting mixed investor sentiments, we opine that risk-reward remains attractive given the sector’s bargain forward valuations (-2 standard deviation below mean).
• - Read this at SGinvestors.io -

European Commission restricts Chinese firms from public medical tenders.

• Last Friday, the conclusions of the first investigation under the International Procurement Instrument (IPI) were announced. The European Commission will exclude Chinese companies from participating in public procurement contracts exceeding €5m and impose a 50% cap on medical devices imported from China.
• Nevertheless, we understand that despite surgical gloves possibly being grouped under CPV 33141420-0 (surgical packs) tenders covered by the IPI measure, other disposable medical gloves are typically grouped under the broader category of PPE (CPV 33700000-7) which is not covered. Hence, we assess that net incremental Europe orders flowing to Malaysia will be modest at potentially 1b-2b pieces annually.

Shifting trends between the US and Europe markets continue.

• - Read this at SGinvestors.io -
• That said, on a net basis, Malaysian glovemakers’ should see improved profitability and margin from this shift.

Fragile sentiment and melancholic selldown have potentially priced in most negatives.

• Read more at SGinvestors.io.

Jack Goh UOB Kay Hian Research | https://research.uobkayhian.com/ 2025-06-24

---

---

---