- 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.
