Glove-makers advance on Ebola fears
The share price of glove-maker were up in Friday morning trade on Ebola fear in Africa, with Supermax rising 14 sen to RM2.31, Kossan adding nine sen to RM4.10, Adventa gaining eight sen to RM1.12 and Top Glove seven sen to RM4.70 as of 11.12am.
KUALA LUMPUR: Glove-makers bucked the weaker broad market on Friday as investors saw buying opportunities amid expectations of a surge demand in gloves following the outbreak of Ebola virus in Africa.
At 11.12am, Supermax was up 14 sen to RM2.31, Kossan added nine sen to RM4.10 while Adventa gained eight sen to RM1.12 and Top Glove edged up seven sen to RM4.70.
Reuters reported Sierra Leone has declared a state of emergency and called in troops to quarantine Ebola victims, joining neighbouring Liberia in imposing controls as the death toll from the outbreak of the virus hit 729 in West Africa.
The World Health Organisation said it would launch a US$100mil response plan on Friday during a meeting with the affected nations in Guinea. It is in urgent talks with donors and international agencies to send more medical staff and resources to the region, it said.
The WHO on Thursday reported 57 new deaths in the four days to July 27 in Guinea, Liberia, Sierra Leone and Nigeria, raising the death toll to 729. It said the number of Ebola cases had topped 1,300.
Source: The Star
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Rubber Products (Gloves, Condoms etc)
Rubber Products (Gloves, Condoms etc)
by winston » Sat Aug 02, 2014 4:37 am
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Re: Rubber Industry ( including Glove, Condoms etc )
by winston » Sat Aug 02, 2014 4:43 am
not vested
Affin Research maintains Overweight on glove industry
KUALA LUMPUR: Affin Research has maintained its Overweight on the gloves sector, naming Kossan as its top pick based on its diversified earnings base and attractive valuations at 11.5 times CY15E EPS.
In a note on Thursday, the research house said it believes that glove demand is inelastic, being deemed a staple product within the healthcare industry it provides the most basic protection against any viral outbreak or diseases.
“We expect overall demand for gloves to remain strong and robust, and to grow at an annual rate of 8-10% over the next few years,” it said.
It added that its positive stance on the sector is premised on robust growth for overallglove demand, improved health and hygiene standards in emerging markets, especially China and India, which could potentially lead to a rise in the usage of gloves.
This also include increased capacity expansion by glove makers to improve product mix which would in turn, boost sales and earnings, and favourable operating environment given softening latex prices and steady US$ vs ringgit.
“Other than that, a pandemic could be a strong catalyst for an increase in demand for gloves, as seen previously during the avian flu (H5N1) and swine flu (H1N1) outbreak.
“While we believe that developed markets such as the US and EU will continue to support overall glove demand, we think emerging countries have the biggest potential to strengthen and make strides in the glove demand given the low penetration of glove usage in their healthcare industry.
“This is in tandem with the rise in hygiene standards, improved healthcare awareness and increasing amount being spent on healthcare amid a growing population and affluence in these markets,” it said.
Source: The Star
Affin Research maintains Overweight on glove industry
KUALA LUMPUR: Affin Research has maintained its Overweight on the gloves sector, naming Kossan as its top pick based on its diversified earnings base and attractive valuations at 11.5 times CY15E EPS.
In a note on Thursday, the research house said it believes that glove demand is inelastic, being deemed a staple product within the healthcare industry it provides the most basic protection against any viral outbreak or diseases.
“We expect overall demand for gloves to remain strong and robust, and to grow at an annual rate of 8-10% over the next few years,” it said.
It added that its positive stance on the sector is premised on robust growth for overallglove demand, improved health and hygiene standards in emerging markets, especially China and India, which could potentially lead to a rise in the usage of gloves.
This also include increased capacity expansion by glove makers to improve product mix which would in turn, boost sales and earnings, and favourable operating environment given softening latex prices and steady US$ vs ringgit.
“Other than that, a pandemic could be a strong catalyst for an increase in demand for gloves, as seen previously during the avian flu (H5N1) and swine flu (H1N1) outbreak.
“While we believe that developed markets such as the US and EU will continue to support overall glove demand, we think emerging countries have the biggest potential to strengthen and make strides in the glove demand given the low penetration of glove usage in their healthcare industry.
“This is in tandem with the rise in hygiene standards, improved healthcare awareness and increasing amount being spent on healthcare amid a growing population and affluence in these markets,” it said.
Source: The Star
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Re: Rubber Industry ( including Glove, Condoms etc )
by winston » Sat Aug 02, 2014 4:47 am
Neutral outlook for rubber glove sector this year
July 5, 2014
WITH the “big four” Malaysian glove makers clamouring for market share in an increasingly crowded space, observers say the sector is looking less attractive in the near term.
AllianceDBS Research contends that “alpha returns” may be elusive for glove stocks.
Kenanga Research, on the other hand, thinks that the concerns about an oversupply situation are overrated.
This is especially since capacity growth by Top Glove Corp Bhd, Kossan Rubber Industries Bhd, Supermax Corp Bhd and Hartalega Holdings Bhd will be delayed or staggered.
It says Kossan’s five billion pieces capacity will only gradually be ramped up starting from March this year for a net increase of 2.5 billion pieces in 2014.
Supermax’s new plant, with an estimated capacity of 5.3 billion pieces, is to commence operations by the end of the second quarter, resulting in a net incremental increase of 2.5 billion pieces.
Top Glove, on its part, is scaling back and only expects two billion pieces in new capacity to come onstream by end-2014, according to Kenanga Research.
Hartalega’s Next Generation Integrated Glove Manufacturing Complex, meanwhile, will see commercial production by the fourth quarter, with a net incremental increase of two billion pieces.
“If we sum this up, the new capacity is only about nine billion pieces, or 56% of the estimated new global demand of 16 billion pieces,” the brokerage explains.
Kenanga Research sees a buying opportunity in the rubber glove sector ahead of an expected recovery in the coming quarters.
“From our channel checks, demand for nitrile gloves is strong. Players are generally facing full capacity constraints and have had to turn away customers.
“We gather that price competition has abated and expect margins of rubber glove players to remain stable and potentially even expand slightly in subsequent quarters.
“Overall, we believe a glut, and hence, price war in the nitrile segment is less likely, at least in the medium term, due to resilient demand and insufficient supply,” Kenanga Research points out.
PublicInvest Research says that although the perception of oversupply will weigh down on the sector, glove makers are focusing on technological and efficiency enhancements rather than just capacity growth.
“If the market were to dissect and categorise each player’s individual strengths, then it would be fairly viewed and not lumped with the stigma of oversupply,” the research outfit points out.
Source: The Star
July 5, 2014
WITH the “big four” Malaysian glove makers clamouring for market share in an increasingly crowded space, observers say the sector is looking less attractive in the near term.
AllianceDBS Research contends that “alpha returns” may be elusive for glove stocks.
Kenanga Research, on the other hand, thinks that the concerns about an oversupply situation are overrated.
This is especially since capacity growth by Top Glove Corp Bhd, Kossan Rubber Industries Bhd, Supermax Corp Bhd and Hartalega Holdings Bhd will be delayed or staggered.
It says Kossan’s five billion pieces capacity will only gradually be ramped up starting from March this year for a net increase of 2.5 billion pieces in 2014.
Supermax’s new plant, with an estimated capacity of 5.3 billion pieces, is to commence operations by the end of the second quarter, resulting in a net incremental increase of 2.5 billion pieces.
Top Glove, on its part, is scaling back and only expects two billion pieces in new capacity to come onstream by end-2014, according to Kenanga Research.
Hartalega’s Next Generation Integrated Glove Manufacturing Complex, meanwhile, will see commercial production by the fourth quarter, with a net incremental increase of two billion pieces.
“If we sum this up, the new capacity is only about nine billion pieces, or 56% of the estimated new global demand of 16 billion pieces,” the brokerage explains.
Kenanga Research sees a buying opportunity in the rubber glove sector ahead of an expected recovery in the coming quarters.
“From our channel checks, demand for nitrile gloves is strong. Players are generally facing full capacity constraints and have had to turn away customers.
“We gather that price competition has abated and expect margins of rubber glove players to remain stable and potentially even expand slightly in subsequent quarters.
“Overall, we believe a glut, and hence, price war in the nitrile segment is less likely, at least in the medium term, due to resilient demand and insufficient supply,” Kenanga Research points out.
PublicInvest Research says that although the perception of oversupply will weigh down on the sector, glove makers are focusing on technological and efficiency enhancements rather than just capacity growth.
“If the market were to dissect and categorise each player’s individual strengths, then it would be fairly viewed and not lumped with the stigma of oversupply,” the research outfit points out.
Source: The Star
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Re: Rubber Industry ( including Glove, Condoms etc )
by winston » Sat Aug 02, 2014 5:08 am
Cost rises weigh on glovemakers BY CHERYL POO
June 2, 2014
“Judging from how rubber prices have fallen by 20% in the fourth quarter last year and first quarter this year, glove players’ profitability are not directly linked to lower global rubber prices alone.
“Our glove pricing is also strongly linked to the exchange rate such as the weakening ringgit against the US dollar. If that goes up, we will also price up,” said Malaysian Rubber Glove Manufacturers Association (Margma) president Lim Kwee Shyan.
PETALING JAYA: The plunge in global rubber prices to almost a five-year low currently may seem like a boon to many rubber glove manufacturers, given the cheaper raw material that represents nearly half of their total production costs, which could result in better profit margins in the coming quarters.
This notion, however, is quickly dismissed by local rubber glove makers, which of late had to succumb to other cost increases such as the electricity and gas tariff hikes this year, as well as the minimum wage policy.
According to rubber glove industry players contacted by StarBiz, the quantum of profit among rubber glove manufacturers had generally been quite stable in recent years despite the current fluctuations in rubber prices.
“Judging from how rubber prices have fallen by 20% in the fourth quarter last year and first quarter this year, glove players’ profitability are not directly linked to lower global rubber prices alone.
“Our glove pricing is also strongly linked to the exchange rate such as the weakening ringgit against the US dollar. If that goes up, we will also price up,” said Malaysian Rubber Glove Manufacturers Association (Margma) president Lim Kwee Shyan.
Therefore, glove manufacturers are constantly finding ways to fairly translate it into a balanced selling price to the customers, added Lim.
“Even if the raw material prices were to hit rock bottom coupled with the collective increases in other costs, local rubber glove players normally have been able to pass the cost back to the customers,” Lim said.
He is positive that industry players’ earnings growth would resume in the subsequent quarters, underpinned by new capacity expansion fuelled by sustained demand for rubber gloves, the weakening of the ringgit against the US dollar, which is positive to rubber glove players, and the sustained low raw material prices.
On the other hand, industry analysts are predicting that the ease of cost pass-through is gradually fading given the shift in pricing power to buyers, which is most evident in the downtrend of average selling prices for both natural rubber and nitrile gloves.
However, they said the rubber glove manufacturers’ earnings were not likely to experience a sharp fall as the higher costs would be partly cushioned by internal efficiency programmes and robust growth of 8% in global rubber gloves demand every year.
While expectations of a strengthening US dollar in relation to the ringgit may diffuse exchange rate pressure, the greater risk of exchange rate volatility and hedging activities by some manufacturers will only increase glove makers’ currency risk and make them worse off.
According to Kossan Rubber Industries Bhd managing director and CEO Datuk Lim Kuang Sia, while hedging activities have helped glove manufacturers to mitigate some of their losses, however, “it is only beneficial when the manufacturer has secured a contract.”
“When you hedge for rubber (raw material), you are actually taking a great risk.
“Hedging is good for longer durations. But for now, while the rubber price is falling, we are not hedging,” explained Kuang Sia.
Rubber as the main raw material currently represents about 40% to 45% of Kossan’s total cost of production for gloves.
Kwee Shyan said that domestic glove manufacturers had been actively increasing automation capacities to optimise their production and gloves quality.
He recalled that some 20 years ago, it took about 20 workers to generate one million pieces of standard rubber gloves.
Through increased automation, it now takes about four to six workers for the production of the same number of gloves.
“The investment in automation has assisted in mitigating our huge dependency on labour and its increasing wage costs,” said Kwee Shyan.
On a different note, he said Margma was seeking the Government to consider the association’s appeal for an extension of the reinvestment allowance for glove manufacturers to enhance and improve their plants.
The original reinvestment allowance is only valid for 15 years, which most mature glove manufacturers had long used up.
Margma is now seeking for an extension of another 10 to 15 years for the reinvestment allowance.
“While the Government’s argument is that the local rubber gloves is already a well matured industry, we believe that the industry players still have a lot to do and will need to further automate their operations in order to stay competitive and ahead of competition from other overseas players,” said Kwee Shyan.
“We also know that the cost increases are bound to happen, but the uncertainty for us is when and by how much ? ”
However, on the bright side, he said the gloves manufacturing sector would grow in tandem with the healthcare sector, which in turn was dependant on the country’s economy. “As striving economies drive the need for better healthcare, Malaysia will stand to benefit given its status as the world’s largest latex glove manufacturer in the world.”
Among the top world class glove makers based in Malaysia include Top Glove Corp Bhd, Supermax Corp Bhd, Kossan and Hartalega Holdings Bhd
Source: The Star
June 2, 2014
“Judging from how rubber prices have fallen by 20% in the fourth quarter last year and first quarter this year, glove players’ profitability are not directly linked to lower global rubber prices alone.
“Our glove pricing is also strongly linked to the exchange rate such as the weakening ringgit against the US dollar. If that goes up, we will also price up,” said Malaysian Rubber Glove Manufacturers Association (Margma) president Lim Kwee Shyan.
PETALING JAYA: The plunge in global rubber prices to almost a five-year low currently may seem like a boon to many rubber glove manufacturers, given the cheaper raw material that represents nearly half of their total production costs, which could result in better profit margins in the coming quarters.
This notion, however, is quickly dismissed by local rubber glove makers, which of late had to succumb to other cost increases such as the electricity and gas tariff hikes this year, as well as the minimum wage policy.
According to rubber glove industry players contacted by StarBiz, the quantum of profit among rubber glove manufacturers had generally been quite stable in recent years despite the current fluctuations in rubber prices.
“Judging from how rubber prices have fallen by 20% in the fourth quarter last year and first quarter this year, glove players’ profitability are not directly linked to lower global rubber prices alone.
“Our glove pricing is also strongly linked to the exchange rate such as the weakening ringgit against the US dollar. If that goes up, we will also price up,” said Malaysian Rubber Glove Manufacturers Association (Margma) president Lim Kwee Shyan.
Therefore, glove manufacturers are constantly finding ways to fairly translate it into a balanced selling price to the customers, added Lim.
“Even if the raw material prices were to hit rock bottom coupled with the collective increases in other costs, local rubber glove players normally have been able to pass the cost back to the customers,” Lim said.
He is positive that industry players’ earnings growth would resume in the subsequent quarters, underpinned by new capacity expansion fuelled by sustained demand for rubber gloves, the weakening of the ringgit against the US dollar, which is positive to rubber glove players, and the sustained low raw material prices.
On the other hand, industry analysts are predicting that the ease of cost pass-through is gradually fading given the shift in pricing power to buyers, which is most evident in the downtrend of average selling prices for both natural rubber and nitrile gloves.
However, they said the rubber glove manufacturers’ earnings were not likely to experience a sharp fall as the higher costs would be partly cushioned by internal efficiency programmes and robust growth of 8% in global rubber gloves demand every year.
While expectations of a strengthening US dollar in relation to the ringgit may diffuse exchange rate pressure, the greater risk of exchange rate volatility and hedging activities by some manufacturers will only increase glove makers’ currency risk and make them worse off.
According to Kossan Rubber Industries Bhd managing director and CEO Datuk Lim Kuang Sia, while hedging activities have helped glove manufacturers to mitigate some of their losses, however, “it is only beneficial when the manufacturer has secured a contract.”
“When you hedge for rubber (raw material), you are actually taking a great risk.
“Hedging is good for longer durations. But for now, while the rubber price is falling, we are not hedging,” explained Kuang Sia.
Rubber as the main raw material currently represents about 40% to 45% of Kossan’s total cost of production for gloves.
Kwee Shyan said that domestic glove manufacturers had been actively increasing automation capacities to optimise their production and gloves quality.
He recalled that some 20 years ago, it took about 20 workers to generate one million pieces of standard rubber gloves.
Through increased automation, it now takes about four to six workers for the production of the same number of gloves.
“The investment in automation has assisted in mitigating our huge dependency on labour and its increasing wage costs,” said Kwee Shyan.
On a different note, he said Margma was seeking the Government to consider the association’s appeal for an extension of the reinvestment allowance for glove manufacturers to enhance and improve their plants.
The original reinvestment allowance is only valid for 15 years, which most mature glove manufacturers had long used up.
Margma is now seeking for an extension of another 10 to 15 years for the reinvestment allowance.
“While the Government’s argument is that the local rubber gloves is already a well matured industry, we believe that the industry players still have a lot to do and will need to further automate their operations in order to stay competitive and ahead of competition from other overseas players,” said Kwee Shyan.
“We also know that the cost increases are bound to happen, but the uncertainty for us is when and by how much ? ”
However, on the bright side, he said the gloves manufacturing sector would grow in tandem with the healthcare sector, which in turn was dependant on the country’s economy. “As striving economies drive the need for better healthcare, Malaysia will stand to benefit given its status as the world’s largest latex glove manufacturer in the world.”
Among the top world class glove makers based in Malaysia include Top Glove Corp Bhd, Supermax Corp Bhd, Kossan and Hartalega Holdings Bhd
Source: The Star
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Re: Rubber Glove Manufacturers
by winston » Sat Aug 02, 2014 5:19 am
Glove makers see muted impact from gas price hike
Apr 19, 2014
While the increase in gas prices is likely to have a muted impact on rubber glove makers, it does throw the spotlight on how efficiently they are run.
For now, Malaysian glove players have the edge on pricing and supply as they account for some 60% of the world’s yearly glove consumption.
Kossan Rubber Industries Bhd managing director and CEO Datuk Lim Kuang Sia says the hike in gas tariffs to the non-power sector announced by Gas Malaysia Bhd two weeks ago is manageable.
“As a business we must look beyond the short term. The increase was within expectation, and we have put a lot of effort into mitigating the impact of higher utility costs, whether from gas, electricity or water,” he tells StarBizWeek.
“We can’t control the external factors. What we can do is boost efficiency and productivity, and reduce labour and production costs through automation, and research and development.”
He says glove makers shouldn’t have a problem passing on the costs from the tariff revision, even though this would be the second time in only four months that they are doing so after electricity rates went up in January.
Rising production costs, Lim explains, are a fact of life for the industry.
“To this end, we have invested our resources into various technologies. We use more automation now, which cuts our dependence on unskilled labor and human error, which can be costly.
“Product quality is more consistent using machines. We have also developed wastewater recycling technologies over the past few years to reduce our water consumption.”
Still, the move by Gas Malaysia was hardly welcome news for manufacturers, coming so soon after the January hike in electricity costs.
“The reduction in natural gas subsidies did not come as a surprise but the short notice period will make it tough for businesses to react before the increase takes effect,” Hartalega Holdings Bhd managing director Kuan Mun Leong says.
“We’ll have to find ways to mitigate the higher cost by passing it on to customers, and at the same time look at ways to reduce our manufacturing costs through better efficiency.”
Supermax Corp Bhd executive chairman and group managing director Datuk Seri Stanley Thai says he expects his firm’s margins to drop at least over the next two to three months because sales contracts had been committed prior to the tariff revision.
Glove prices will rise for all manufacturers, he tells StarBizWeek via email. “In the case of Supermax, depending on the range and specification of the product, the increase ranges from 2.5% to 4.5%.”
On balance, analysts see no more than a 1% to 2% boost to the rubber glove sector’s energy costs from the new gas tariff.
According to PublicInvest Research, energy makes up about 10% of total production costs for a glove maker, most of it coming from natural gas.
Thai of Supermax believes the hike in gas prices could spur the use of alternative energy sources such as biomass.
On the other hand, Kossan’s Lim says biomass isn’t a panacea as it will get more expensive in tandem with demand.
“Natural gas is still the better option as it is cleaner, convenient and more efficient. The market is efficient, so if there is more demand for biomass, prices on the burning input will rise.
“What is more important is to invest in technologies that will help to lower consumption in the long run. Always prepare for tomorrow – that’s the rule of survival in business.”
Source: The Star
Apr 19, 2014
While the increase in gas prices is likely to have a muted impact on rubber glove makers, it does throw the spotlight on how efficiently they are run.
For now, Malaysian glove players have the edge on pricing and supply as they account for some 60% of the world’s yearly glove consumption.
Kossan Rubber Industries Bhd managing director and CEO Datuk Lim Kuang Sia says the hike in gas tariffs to the non-power sector announced by Gas Malaysia Bhd two weeks ago is manageable.
“As a business we must look beyond the short term. The increase was within expectation, and we have put a lot of effort into mitigating the impact of higher utility costs, whether from gas, electricity or water,” he tells StarBizWeek.
“We can’t control the external factors. What we can do is boost efficiency and productivity, and reduce labour and production costs through automation, and research and development.”
He says glove makers shouldn’t have a problem passing on the costs from the tariff revision, even though this would be the second time in only four months that they are doing so after electricity rates went up in January.
Rising production costs, Lim explains, are a fact of life for the industry.
“To this end, we have invested our resources into various technologies. We use more automation now, which cuts our dependence on unskilled labor and human error, which can be costly.
“Product quality is more consistent using machines. We have also developed wastewater recycling technologies over the past few years to reduce our water consumption.”
Still, the move by Gas Malaysia was hardly welcome news for manufacturers, coming so soon after the January hike in electricity costs.
“The reduction in natural gas subsidies did not come as a surprise but the short notice period will make it tough for businesses to react before the increase takes effect,” Hartalega Holdings Bhd managing director Kuan Mun Leong says.
“We’ll have to find ways to mitigate the higher cost by passing it on to customers, and at the same time look at ways to reduce our manufacturing costs through better efficiency.”
Supermax Corp Bhd executive chairman and group managing director Datuk Seri Stanley Thai says he expects his firm’s margins to drop at least over the next two to three months because sales contracts had been committed prior to the tariff revision.
Glove prices will rise for all manufacturers, he tells StarBizWeek via email. “In the case of Supermax, depending on the range and specification of the product, the increase ranges from 2.5% to 4.5%.”
On balance, analysts see no more than a 1% to 2% boost to the rubber glove sector’s energy costs from the new gas tariff.
According to PublicInvest Research, energy makes up about 10% of total production costs for a glove maker, most of it coming from natural gas.
Thai of Supermax believes the hike in gas prices could spur the use of alternative energy sources such as biomass.
On the other hand, Kossan’s Lim says biomass isn’t a panacea as it will get more expensive in tandem with demand.
“Natural gas is still the better option as it is cleaner, convenient and more efficient. The market is efficient, so if there is more demand for biomass, prices on the burning input will rise.
“What is more important is to invest in technologies that will help to lower consumption in the long run. Always prepare for tomorrow – that’s the rule of survival in business.”
Source: The Star
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Re: Rubber Glove Manufacturers
by winston » Sat Aug 02, 2014 5:29 am
Top Glove and Supermax to play catch-up, says HwangDBS
july 17, 2013
KUALA LUMPUR: Steady demands, falling latex prices and the strengthening US dollar are painting a happy picture for Malaysian rubber glove producers, says HwangDBS as it calls a Buy on Top Glove and Supermax.
It says while glove-makers like Hartalega and Kossan have run far ahead within the sector, with share prices for the former appreciating by more than 115% since the end of 2011 and the latter’s adding about 72% since the end of Feb this year, Top Glove and Supermax have been sluggish.
As such, the stage may be set the stage for Top Glove and Supermax to play catch-up.
“Top Glove could ride on a technical rebound soon. From a fundamental perspective, our research team is recommending a Buy on the stock with a target price of RM7.20,” HwangDBS says.
“We like Top Glove for its sustainable sales volume growth and healthy balance sheet. On the chart, its share price – up just 9.1% so far this year – may be on the verge of a technical breakout.
“If so, then the shares are set to advance to the resistance targets of RM6.70 (immediate) and RM7.00 (next), translating to potential upsides of 9% and 14%, respectively,” it says, pegging support lines for downside risks from the current price of RM6.14 at RM6.05 and RM5.90.
On the same note, it thinks Supermax, the smallest in terms of market cap at RM1.4bil, may also be due for an upwards trajectory.
Its share price performance has been flattish, appreciating by about 8.2% year-to-date to RM2.09 and is trading at a cheap CY14 price-earnings ratio of 8.9 times on consensus earnings. The price was also depressed by the sell-down by EPF, which has cut its stake from 8.9% to just below 5% on April 18 this year.
“Technically speaking, a positive breakout on strong volume on Monday could signal further upsides for Supermax shares. We reckon the share price will probably extend its run-up to enter the resistance range of RM2.25-RM2.40,” it says, drawing support lines at RM1.85 and RM1.65.
Source: The Star
july 17, 2013
KUALA LUMPUR: Steady demands, falling latex prices and the strengthening US dollar are painting a happy picture for Malaysian rubber glove producers, says HwangDBS as it calls a Buy on Top Glove and Supermax.
It says while glove-makers like Hartalega and Kossan have run far ahead within the sector, with share prices for the former appreciating by more than 115% since the end of 2011 and the latter’s adding about 72% since the end of Feb this year, Top Glove and Supermax have been sluggish.
As such, the stage may be set the stage for Top Glove and Supermax to play catch-up.
“Top Glove could ride on a technical rebound soon. From a fundamental perspective, our research team is recommending a Buy on the stock with a target price of RM7.20,” HwangDBS says.
“We like Top Glove for its sustainable sales volume growth and healthy balance sheet. On the chart, its share price – up just 9.1% so far this year – may be on the verge of a technical breakout.
“If so, then the shares are set to advance to the resistance targets of RM6.70 (immediate) and RM7.00 (next), translating to potential upsides of 9% and 14%, respectively,” it says, pegging support lines for downside risks from the current price of RM6.14 at RM6.05 and RM5.90.
On the same note, it thinks Supermax, the smallest in terms of market cap at RM1.4bil, may also be due for an upwards trajectory.
Its share price performance has been flattish, appreciating by about 8.2% year-to-date to RM2.09 and is trading at a cheap CY14 price-earnings ratio of 8.9 times on consensus earnings. The price was also depressed by the sell-down by EPF, which has cut its stake from 8.9% to just below 5% on April 18 this year.
“Technically speaking, a positive breakout on strong volume on Monday could signal further upsides for Supermax shares. We reckon the share price will probably extend its run-up to enter the resistance range of RM2.25-RM2.40,” it says, drawing support lines at RM1.85 and RM1.65.
Source: The Star
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Re: Rubber Glove Manufacturers
by winston » Tue Sep 02, 2014 8:01 pm
M'sia glove 2014 exports to top last year's, says MARGMA BY JOHN LOH
KUALA LUMPUR: Malaysia's rubber glove exports in 2014 are expected to top last year's RM10.5bil as demand for gloves grows 8% to 178.6 billion pieces this year, said Malaysian Rubber Glove Manufacturers Association (MARGMA) president Lim Kee Shyan.
Exports for the first half of 2014 had already hit RM6bil, backed by more stringent healthcare requirements in emerging markets, Lim told journalists during the opening of the International Rubber Glove Conference and Exhibition 2014 on Tuesday.
Malaysia had last year exported some RM14.5bil worth of rubber products, of which RM10.5bil were rubber gloves.
Glove exports today account for nearly 80% of the country's total export earnings from the rubber products sector, and make up 54% of global rubber glove exports in terms of value.
"We are confident that glove demand will continue to grow at a rate of 8% to 12% a year," Lim said, adding that demand was estimated to exceed 300 billion pieces before 2020.
"This is an opportunity for both natural and synthetic rubber glove players. Related and supporting industries will benefit as well," he said.
Malaysia is expected to maintain its dominance over the world's rubber glove production with exports of 112.5 billion pieces of gloves this year, or a 63% market share, according to MARGMA.
Source: The Star
KUALA LUMPUR: Malaysia's rubber glove exports in 2014 are expected to top last year's RM10.5bil as demand for gloves grows 8% to 178.6 billion pieces this year, said Malaysian Rubber Glove Manufacturers Association (MARGMA) president Lim Kee Shyan.
Exports for the first half of 2014 had already hit RM6bil, backed by more stringent healthcare requirements in emerging markets, Lim told journalists during the opening of the International Rubber Glove Conference and Exhibition 2014 on Tuesday.
Malaysia had last year exported some RM14.5bil worth of rubber products, of which RM10.5bil were rubber gloves.
Glove exports today account for nearly 80% of the country's total export earnings from the rubber products sector, and make up 54% of global rubber glove exports in terms of value.
"We are confident that glove demand will continue to grow at a rate of 8% to 12% a year," Lim said, adding that demand was estimated to exceed 300 billion pieces before 2020.
"This is an opportunity for both natural and synthetic rubber glove players. Related and supporting industries will benefit as well," he said.
Malaysia is expected to maintain its dominance over the world's rubber glove production with exports of 112.5 billion pieces of gloves this year, or a 63% market share, according to MARGMA.
Source: The Star
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winston - Billionaire Boss
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Re: Rubber Glove Manufacturers
by winston » Sat Nov 01, 2014 9:48 pm
Overweight call on rubber gloves sector maintained: Kenanga Research
30 OCTOBER 2014
KUALA LUMPUR: Kenanga Research maintained its ‘overweight’ rating for the rubber gloves sector as industry players are able to weather themselves from the revision of natural gas tariffs for the non-power sector.
The research firm said rubber gloves players were generally able to pass on the cost increase judging from past experience in previous electricity and natural gas tariff hikes back in 2013 and in 2014, respectively.
“After three quarters in the lull, we believe rubber glove players under our coverage are poised for re-rating.
“The positive outlook is driven by commercial production of new capacity expected to come on-stream by the fourth quarter of 2014, which will drive earnings growth,” said Kenanga Research in a note today.
In a filing to Bursa Malaysia yesterday, Gas Malaysia Bhd said the government had approved the natural gas tariff revision for the non-power sector in Peninsular Malaysia effective Nov 1, 2014 by an average of 2.3 per cent.
This is the second increase for natural gas within a year.
“We expect margins and earnings of glove players to sustain in subsequent quarters driven by sustained high demand for nitrile gloves, easing of both input raw material nitrile and latex prices, and capacity constraint for nitrile gloves,” said Kenanga Research.
It added that the downtrend in average selling prices (ASP) over the last two quarters were not entirely due to price competition but also to lower raw material prices.
“From our channel checks, players are generally facing full capacity constraint and have to turn away customers taking advantage of the lower ASPs which resulted in an overwhelming demand situation,” it added.
Source: BERNAMA
30 OCTOBER 2014
KUALA LUMPUR: Kenanga Research maintained its ‘overweight’ rating for the rubber gloves sector as industry players are able to weather themselves from the revision of natural gas tariffs for the non-power sector.
The research firm said rubber gloves players were generally able to pass on the cost increase judging from past experience in previous electricity and natural gas tariff hikes back in 2013 and in 2014, respectively.
“After three quarters in the lull, we believe rubber glove players under our coverage are poised for re-rating.
“The positive outlook is driven by commercial production of new capacity expected to come on-stream by the fourth quarter of 2014, which will drive earnings growth,” said Kenanga Research in a note today.
In a filing to Bursa Malaysia yesterday, Gas Malaysia Bhd said the government had approved the natural gas tariff revision for the non-power sector in Peninsular Malaysia effective Nov 1, 2014 by an average of 2.3 per cent.
This is the second increase for natural gas within a year.
“We expect margins and earnings of glove players to sustain in subsequent quarters driven by sustained high demand for nitrile gloves, easing of both input raw material nitrile and latex prices, and capacity constraint for nitrile gloves,” said Kenanga Research.
It added that the downtrend in average selling prices (ASP) over the last two quarters were not entirely due to price competition but also to lower raw material prices.
“From our channel checks, players are generally facing full capacity constraint and have to turn away customers taking advantage of the lower ASPs which resulted in an overwhelming demand situation,” it added.
Source: BERNAMA
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winston - Billionaire Boss
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Re: Rubber Glove Manufacturers
by winston » Mon Dec 29, 2014 8:28 am
not vested
GMT DJ Malaysian Glove Sector Gets No Big Boost From Ringgit Weakness -- Market Talk
0736 GMT [Dow Jones] TA Securities said that it does not expect glove manufacturers to gain significantly from a stronger dollar.
"Nonetheless ... the higher USD/MYR rate will translate into lower prices for Malaysian products," it says.
This will help support capacity expansion plans during the year.
The brokerage a buy recommendation on Kossan Rubber Industries [7153.KU] at 5.40 ringgit/share, and a hold rating on Top Glove (7113.KU) at 4.70 ringgit/share. Sell Hartalega (5168.KU) and Supermax (7106.KU) at a target price of 6.50 ringgit/share and 2.20 ringgit/share."
Source: Dow Jones Newswires
GMT DJ Malaysian Glove Sector Gets No Big Boost From Ringgit Weakness -- Market Talk
0736 GMT [Dow Jones] TA Securities said that it does not expect glove manufacturers to gain significantly from a stronger dollar.
"Nonetheless ... the higher USD/MYR rate will translate into lower prices for Malaysian products," it says.
This will help support capacity expansion plans during the year.
The brokerage a buy recommendation on Kossan Rubber Industries [7153.KU] at 5.40 ringgit/share, and a hold rating on Top Glove (7113.KU) at 4.70 ringgit/share. Sell Hartalega (5168.KU) and Supermax (7106.KU) at a target price of 6.50 ringgit/share and 2.20 ringgit/share."
Source: Dow Jones Newswires
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Re: Rubber Glove Manufacturers
by winston » Fri Jan 02, 2015 8:11 am
RUBBER PRODUCTS SECTOR
Overweight
RHB Research maintains its overweight call on the rubber products sector on the back of a favourable structural and macroeconomic environment. It believes earnings will be capacity driven while operating efficiency will be required to outperform peers.
As such it likes Hartalega Holdings Bhd and Kossan Rubber Industries Bhd for their economies of scale, leadership in the nitrile glove segment and accelerated capex cycle.
Global glove consumption is expected to remain strong, led by demand from the healthcare segment, and is anticipated to expand 8% to 10% per annum. Demand is often touted as inelastic due to the crucial protective role that gloves provide, especially for the healthcare sector. Thus, glove suppliers have a resilient earnings profile combining defensive qualities with steady earnings growth.
Meanwhile, RHB Research believes that the additional capacity from the expansion in nitrile production will be absorbed by the market. The commissioning of new production lines is being done progressively, which will enable the glove makers to time upcoming capacity to the prevailing demand landscape.
The strength in the US dollar will benefit the industry because revenue will have a greater sensitivity to the greenback relative to costs. A 3% increase in the US dollar exchange rate could lift the industry’s earnings by 2% to 4%.
Hence, RHB Research maintains its buy recommendation on Karex Bhd as it likes the company for its organic and inorganic growth potential.
The research house has a higher target price of RM3.89 (from RM3.43), which is 20 times its 2016 price-earnings ratio. This is a 14.4% upside, on the back of an expected three-year earnings-per-share compounded growth of 23.8%.
RHB Research added that heightened competition among glove players could lead to lower average selling prices and margins that, in particular, would not bode well for Top Glove and Supermax, as both are margin laggards in the industry.
It likes stocks in the rubber products sector that have good earnings growth, strong balance sheets and decent dividend yields.
Its top picks are Hartalega, Kossan Rubber Industries and Karex.
Source: RHB Research
Overweight
RHB Research maintains its overweight call on the rubber products sector on the back of a favourable structural and macroeconomic environment. It believes earnings will be capacity driven while operating efficiency will be required to outperform peers.
As such it likes Hartalega Holdings Bhd and Kossan Rubber Industries Bhd for their economies of scale, leadership in the nitrile glove segment and accelerated capex cycle.
Global glove consumption is expected to remain strong, led by demand from the healthcare segment, and is anticipated to expand 8% to 10% per annum. Demand is often touted as inelastic due to the crucial protective role that gloves provide, especially for the healthcare sector. Thus, glove suppliers have a resilient earnings profile combining defensive qualities with steady earnings growth.
Meanwhile, RHB Research believes that the additional capacity from the expansion in nitrile production will be absorbed by the market. The commissioning of new production lines is being done progressively, which will enable the glove makers to time upcoming capacity to the prevailing demand landscape.
The strength in the US dollar will benefit the industry because revenue will have a greater sensitivity to the greenback relative to costs. A 3% increase in the US dollar exchange rate could lift the industry’s earnings by 2% to 4%.
Hence, RHB Research maintains its buy recommendation on Karex Bhd as it likes the company for its organic and inorganic growth potential.
The research house has a higher target price of RM3.89 (from RM3.43), which is 20 times its 2016 price-earnings ratio. This is a 14.4% upside, on the back of an expected three-year earnings-per-share compounded growth of 23.8%.
RHB Research added that heightened competition among glove players could lead to lower average selling prices and margins that, in particular, would not bode well for Top Glove and Supermax, as both are margin laggards in the industry.
It likes stocks in the rubber products sector that have good earnings growth, strong balance sheets and decent dividend yields.
Its top picks are Hartalega, Kossan Rubber Industries and Karex.
Source: RHB Research
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