• Top Glove, Medtecs International, UG HealthCare and Riverstone have averaged 24% returns in the month-to-date, partially attributed to the Biden administration announcing higher tariff rates for certain imports from China including PPE items such as respirators and face masks, in addition to rubber medical and surgical gloves.

• At the same time, trading activity in these stocks has surged. This month, Top Glove's average daily turnover has surged more than 5-fold from the preceding 4 months. As a secondary listing, Top Glove also consistently ranks among the 50 SGX-listed stocks with the highest dollar amounts on the prevailing bid & offer.

• While Riverstone has seen the least returns of the four in May with an 18% gain, it has booked the strongest 2024 year-to-date gains of the four at 38%. The stock maintains a net cash position, with a consistent dividend payout since listing, and diversifies its revenue with hi-tech cleanroom gloves and premium healthcare gloves.

On 14 May, the US government announced for certain personal protective equipment (PPE), including certain respirators and face masks, its tariff rates on China imports will increase from 0–7.5% to 25% in 2024, with tariffs on rubber medical and surgical gloves increasing from 7.5% to 25% in 2026. Malaysia is the largest global producer and exporter of rubber gloves. While the Malaysian Rubber Glove Manufacturers Association (MARGMA) has maintained that these tariffs are not expected to have an immediate impact on the industry, Malaysia-based rubber glove producers and distributors have seen a significant increase in trading activity this month.

As maintained by Top Glove, gloves have evolved from basic protective gear to sophisticated, technologically advanced products that cater to a wide range of applications. Aside from health & biotechnology and food and beverage applications, the Group maintain that emerging 5G technology, AI and IoT, has also driven the demand of gloves used in research and development, industry and electronics.

Prior to the US government announcement on 14 May, the four most traded stocks with rubber glove or PPE businesses had averaged 6% gains for the month of May, which have since been extended to 24% average gains for the month. These four stocks, with a combined average daily turnover of S$5.2 million in the 2024 year to 21 May are tabled below.

Source: SGX, Refinitiv (Data as of 21 May 2024).

Medtecs International and UG Healthcare are listed on Catalist. As detailed in the table above, the four stocks average 54% 260-day volatility, which is more than double the average 21% volatility seen by the 30 STI constituents. While Riverstone has seen more trading activity than the secondary listing of Top Glove this year, the latter maintains a higher market capitalisation.

Sri Trang Gloves (SGX:STG) is also traded on SGX, however ranks among the less traded stocks by average daily turnover. For its 1QFY24 (ended 31 Mar), the Group reported its sales volume grew across all products to break a previous record, reaching 10,091 million pieces. The Average Selling Price also increased as demand started to recover and revert to the normal industry growth rate.

Top Glove Corporation Maintains Significant Market Depth

Since the 14 May announcement, Top Glove has seen the strongest gains of the above tabled stocks, with a 28% rally taking its May month-to-date gain to 38%. Established in 1991 and headquartered in Malaysia, Top Glove Corporation is the largest global manufacturer of gloves. The secondary listing of Top Glove Corporation has ranked among the 50 Singapore-listed stocks with the highest bid and ask depth throughout 2024. The five sessions of 15 May through to 21 May saw the average best bid depth for the SGX listing of Top Glove Corporation at S$277,117 and average best ask depth at S$377,462, for a combined S$653,380 average bid and ask depth.

Riverstone Holdings Led Segment In 2024 Year-To-Date

As discussed in 5 Manufacturing Stocks Attracting a Surge in Trading Volume in 2024 earlier this week, Riverstone reported 1QFY24 (ended 31 March) net profit came in 54.5% higher than 1QFY23 at RM72.2 million, marking the fifth consecutive quarter of sequential growth. The stock has generated a 38% total return in the 2024 year through to 21 May, bringing its 5-year total return to 232%. At the same time the stock is trading below its current consensus estimate target price of S$1.04 and is also trading at a P/B ratio which is 10% below its 5-year average P/B. The stock maintains a net cash position, with a consistent dividend payout since listing, and diversifies its revenue with hi-tech cleanroom gloves and premium healthcare gloves.

Medtecs International Corporation Going for Growth in 2024

Medtecs International, a key player in PPE supply and healthcare logistics, faced a 6.4% revenue decline to US$52.64 million in FY23 (ended 31 Dec). This was attributed to weaker performance in Taiwan and the Philippines, resulting in a net loss of US$22.49 million due to various financial setbacks. Despite this, the company is optimistic about growth in 2024, focusing on the aging population's needs with new home health products and medical devices.

Their strategy includes customer expansion, product innovation, and new distribution channels. The Group plan to improve operational efficiency and supply chain agility to respond to market changes and customer needs effectively. The Group has completed a nitrile glove factory in Cambodia, which is expected to enhance its product base and benefit from diversification efforts. Strategic partnerships are also being formed to improve supply chain management, and the Group is capitalising on the global recognition of its healthcare and safety products and has invested in marketing the "Medtecs" and "CoverU" brands.

Medtecs International ranked among the 25 most traded stocks by average daily turnover in 2020, and has booked the strongest returns of the four stocks over the past five years. The stock is also trading at a P/B ratio which is 60% below its 5-year average P/B.