Top Glove - Maybank Research 2026-06-10: Downgrade To SELL As Earnings Uplift May Not Be Sustainable

• We expect Top Glove (SGX:BVA)'s 3QFY26 earnings to exceed our expectations, driven by higher ASPs, the consumption of lower-cost pre-war nitrile latex supply and inventory gains. However, we believe these benefits are unlikely to be sustainable as ASPs are trending lower while energy costs are rising.

Expect strong 3QFY26 results

• - Read this at SGinvestors.io -

• While ASPs remain elevated at above US$20/kpcs vs pre-Middle East tension levels of US$17-18/kpcs, pricing has started to ease to US$24.5-26.5/kpcs in Jun 26 from a peak of US$26-28/k pcs in Apr-May 26 as nitrile latex supply stabilises, suggesting that industry pricing has likely peaked.

• - Read this at SGinvestors.io -

Earnings windfall could be short-lived

• We believe the earnings windfall could be short-lived, with margins moderating from 4QFY26 as ASPs ease towards US$20-21/k pcs on stable nitrile latex supply and gas tariffs rise, including a potential >40% hike in 4QCY26.

• While profitability should remain above FY23-24 trough levels, we see margin compression risk in FY27E, as Malaysia glove makers may struggle to fully pass through higher energy costs amid industry oversupply and competition from lower-cost China glove makers, which benefit from cheaper coal-based energy and higher labour productivity.

Earnings lifted to reflect higher margin

• Read more at SGinvestors.io.

Wong Wei Sum CFA Maybank Research | https://www.maybanktrade.com.sg/ 2026-06-10

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