Top Glove - RHB Research 2026-06-19: The Hard Part Starts Now; Keep SELL

• Top Glove (SGX:BVA)’s 3QFY26 results exceeded expectations, with 9MFY26 EBITDA margins of 15%. Management is confident of maintaining ~15% EBITDA margins for the remainder of FY26. However, we see risks to this outlook from continued pricing pressure and a potential slowdown in demand as customers defer purchases in anticipation of lower prices.

• - Read this at SGinvestors.io -

3QFY26 Ahead.

• Top Glove's 3QFY26 core PATAMI came in at MYR127.9m (+317% q-o-q, 3QFY25: -MYR2.3m), after adjusting for MYR46.9m on one-off charges largely relating to loss on disposal of property, plant & equipment (PPE), write-off of older production line, and impairments associated to its vinyl glove facilities. This brings 9MFY26 numbers to MYR196m (9MFY25: -MYR0.9m), representing 134% and 124% of our and consensus’ estimates.

• - Read this at SGinvestors.io -

What now?

• The key question remains whether current margins are sustainable. Management is confident of maintaining ~15% EBITDA margins for the remainder of FY26, but we see risks of disappointment from aggressive pricing by China producers and a potential slowdown in demand.

• Meanwhile, domestic gas tariffs typically reflect fuel cost adjustments with a roughly six months lag, meaning any increase in gas costs could only become apparent from October onwards. As a result, Malaysian producers currently enjoy a temporary cost advantage, but this may narrow over the coming quarters.

• Combined with continued pricing pressure, we believe the industry's ability to sustain current margin levels remains uncertain.

Earnings adjustment.

• Read more at SGinvestors.io.

Eddy Do RHB Securities Research | https://www.rhbgroup.com/ 2026-06-19

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