Top Glove - UOB Kay Hian 2025-10-10: Improving Earnings Momentum In 4QFY25, But Challenges Persist

• Top Glove reported 4QFY25 core net profit of RM25m (3QFY25: RM2.3m core losses) and higher revenue of RM889.6m (+7% q-o-q). For FY25, the core net profit of RM24m was above our expectations (RM7m) but below the consensus (RM59m).
• - Read this at SGinvestors.io -

Operating parameters are mixed in 4QFY25.

• 4QFY25 volume sales strengthened 18% q-o-q, reflecting strong recovery of demand from US customers as earlier overstocked inventories depleted. Input costs were also much lower as key raw material costs declined meaningfully (nitrile butadiene -10% q-o-q; latex concentrate cost -14% q-o-q). These offset ASP contraction (-5% q-o-q) to around US$18/’000 pcs due to intensifying competition from China competitors, besides softening MYR/US$ rates (-3.5% q-o-q).
• - Read this at SGinvestors.io -

Management guides a potential 20-30% volume sales improvement in FY26, back to pre-COVID-19 levels…

• Management estimates that FY26 demand will see strong improvement as US distributors’ overstocked inventories are depleted. This may bring Top Glove’s FY26 volume sales to 48- 52b pieces (FY25: 40b pieces), and utilisation rate to 73-79% (FY25: 63%).
• Top Glove's FY26’s earnings growth will be supported by:
  1. higher US sales mix (4QFY25: 42%) with stabilising ASP,
  2. falling raw material costs and natural gas tariffs, and
  3. margin expansion on better efficiency and utilisation rate.

…but profitability margin takes time to recover.

• Read more at SGinvestors.io.

Jack Goh UOB Kay Hian Research | https://research.uobkayhian.com/ 2025-10-10

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