- While Top Glove (SGX:BVA) charted a commendable sales volume growth in 1QFY25 (+17% y-o-y; +4% q-o-q), we anticipate a further improvement of 5-6% y-o-y in 2QFY26.
Anticipating sequential growth, albeit with slower momentum.
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- We also forecast that 2QFY26 utilisation rate will improve to 75-76% (1QFY26:71.6%) based on the current 65b pieces annual capacity.
Potential input cost pressures if Middle East tension persists.
- Following Israel and US’ strikes on Iran last week, gas and chemical prices have spiked after the disruption of shipping and energy facilities in the Middle East region. We assess that Top Glove’s production costs such as fuel costs (natural gas) and raw material costs (natural latex and acrylonitrile) will likely see upward pressures (8-12% q-o-q) if WTI crude stays above the current US$82-85 range.
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2026-27 to see modest earnings recovery, despite challenges.
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