- We believe the rally of Top Glove's share price has overshot underlying fundamentals. We view recent geopolitical developments, including the temporary ceasefire, as transitory – they do not alter the sector’s core issue of structural oversupply.
- - Read this at SGinvestors.io -
We see risk-reward for the sector skewed to the downside.
- Under our anchor sector assumption, which includes stable demand for nitrile gloves, resilient China feedstock supply, and broadly similar cost inflation between Malaysia and China glove manufacturers, the market remains structurally oversupplied, with China manufacturers continuing to act as the price setter.
- - Read this at SGinvestors.io -
- Even in a tightening supply environment, the sector’s upside appears constrained.
Margin expansion likely transient.
- Read more at SGinvestors.io.
