Rubber Products (Gloves, Condoms etc)

[behappyalways]

TA Securities trims earnings forecasts, target prices for Hartalega, Top Glove, Supermax amid higher minimum wage
https://www.theedgemarkets.com/article/ ... ermax-amid

[winston]

TA Securities trims earnings forecasts, target prices for Hartalega, Top Glove, Supermax amid higher minimum wage

by Syafiqah Salim

Source: theedgemarkets.com

https://www.theedgemarkets.com/article/ ... ermax-amid

[behappyalways]

本地口罩需求量减少至少四成 已有10%公司退出口罩市场
https://m.youtube.com/watch?v=-oIpc4xYMZQ

[winston]

Glove stocks up on monkeypox outbreak, but buying seen as knee-jerk reaction

by Tan Siew Mung

Rakuten: “I don't think monkeypox will make a significant change to glove [players'] fundamentals as the numbers are not significant. I think the rally is more on an improvement in overall market sentiment.

TA: “Their fundamentals have not changed lately. The outlook for the glove sector is still challenging as the overall utilisation rate is still at about 70%”.

More than 80 cases have been confirmed in the recent outbreak in Europe, the US, Canada and Australia.

The report also highlighted that monkeypox does not tend to spread easily between people and the illness is usually mild.

The virus is most common in remote parts of Central and West Africa,

Source: theedgemarkets.com

https://www.theedgemarkets.com/node/620834

[winston]

Glove stocks' sharp price fall: Analysts say valuations appear attractive but 'wait for more clarity'

by Syafiqah Salim

Public Investment said it does not think the improving Covid-19 situation will cause a significant drop in rubber gloves' consumption as glove demand should remain elevated above pre-Covid-19 levels due to the expected increase in glove demand from emerging markets with low per capita consumption besides rising hygiene awareness globally.

"Reopening of economies should further spur the demand of gloves from non-medical sectors. [Glove] Demand is expected to grow at between 10% and 15% per annum as compared to 8%-10% pre-pandemic".

Other key factors to consider include the impact on glove manufacturers from costlier raw materials and a weaker ringgit against the US dollar.

Source: theedgemarkets.com

https://www.theedgemarkets.com/article/ ... re-clarity

[winston]

Malaysia Gloves Sector
Enduring (painful) structural change
Demand-supply will take time to rebalance

As ASP/ earnings outlook remains challenging, the glove makers have postponed/put their capacity expansion plans on hold.

Demand-supply disequilibrium will take time to rebalance and price war is inevitable.

Strong balance sheet is paramount to ride out the storm.

We lower our earnings forecasts by -16% to -42% after assuming lower utilization rate
of 70% (from 75-80%) and cut out TPs after we roll over our base year for valuation.

Maintain NEGATIVE. We are SELLers of TOPG, HARTA and KRI.

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/268278.pdf

[winston]

Another blow to Malaysian glove makers?

Tariffs on Chinese goods may be removed by US US President Joe Biden may cut import tariffs on Chinese goods as soon as this week according to several news channels.

If the import tariff on gloves (7.5%) is being removed, ASP is expected to fall further as the Chinese glove makers would have more room to adjust their ASP in order to capture market share in the US.

Price war could escalate further and this reinforces our NEGATIVE stance on the gloves sector. We are SELLers of TOPG, HARTA and KRI.

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/268839.pdf

[winston]

Rubber glove oversupply situation likely to continue

Oversupply situation coupled with inflationary pressures cost pressures from higher raw materials, wages and natural gas costs.

Source: The Star

https://www.thestar.com.my/business/bus ... o-continue

[winston]

Top Glove's 99pc profit drop could hurt Malaysia as China rivals ramp up supply

by Ida Lim

Malaysia's exports of rubber items had last year spiked by 50 per cent to nearly US$14 billion but said rivals in China have been upping their production.

Chinese glove makers were said to be currently selling below US$20 (about RM88.49) per thousand pieces of gloves, as compared to Malaysian glove makers' average selling price of around US$22 to US$24 per thousand pieces.

Source: Malay Mail

https://malaysia.news.yahoo.com/report- ... 19152.html

[winston]

Gloves – Malaysia
Washout Earnings, But The Worst Is Yet To Come

We expect earnings to decline further as demand-supply dynamics remain imbalanced.

However, downside is increasingly limited with some producers already falling into
losses.

Against this backdrop, sector valuations are trading close to -1SD of the prepandemic five-year PE mean.

Hence, the reward-to-risk payoff appears balanced at this juncture.

Maintain MARKET WEIGHT.

Source: UOBKH

https://research.uobkayhian.com/content ... f1c2a3c5c1