Latest news with #TopGloveCorpBhd
The Star
17-07-2025
- Business
- The Star
Top Glove set to capture more market share in US
Top Glove said it believes Chinese competitors cannot sustain ultra-low pricing seen during from 2022 to 2023. PETALING JAYA: Top Glove Corp Bhd is expected to register a robust recovery, buoyed by a strong uptick in orders from the United States that could drive double-digit sales volume growth in the fourth quarter of its financial year ending Aug 31, 2025 (4Q25) analysts say. The company sees the United States as a key growth engine, with current momentum in exports pointing to a steady climb in market share. During a recent meeting with Top Glove's management, Kenanga Research reported a marked improvement in sales to the US , which gained further traction this month and now accounts for 30% of the group's total volume – a significant jump from 26% in the previous quarter. The research house added that Top Glove is potentially taking market share away from other glove players in the US market. 'The group is aiming for the United States to account for 40% of group sales volume over the next two years,' Kenanga Research said. 'It is optimistic about strong sequential sales volume growth in 4Q25 due to higher orders from the US market which more than offset a slower Europe,' it added. Top Glove's confidence is underpinned by a notable rise in utilisation rates, which hitt 65% as of last month, compared with 61% in 3Q25 and 58% in 2Q25. The uptick translates to over 3.3 billion pieces of gloves sold per month – up from below three billion in April – which could add as much as RM70mil per quarter, or 2% of revenue. 'Top Glove expects sales volume to grow 15% quarter-on-quarter, driven by US orders and higher utilisation in 4Q25,' Kenanga Research said. 'In fact, utilisation rate last month was 65% compared with 61% in 3Q25,' the research house added. The group also appears unfazed by recent tariff-related concerns, expressing optimism that demand will remain strong. 'Top Glove feels that there is only so long that customers can hold off buying,' the research house said, adding that order volumes began rebounding over the last two months, with the positive trend expected to persist next month. On the pricing front, the group highlighted the competitive edge Malaysian producers still hold despite shifting tariff dynamics. US-imposed tariffs of 80% to 130% on Chinese medical gloves for this year and next year have widened the pricing gap in Malaysia's favour by between 10% and 30%, while Vietnamese and Indonesian gloves, though subject to lower tariffs of 20% and 19%, respectively, have minimal global market share or production capacity to pose a major threat. 'However, a Chinese player may ramp up production in Indonesia due to the tariff differential, which would be a risk, albeit starting at around just 1% of global supply by our checks, and this may be a negative for Malaysia given an improved tariff rate of 19% versus Malaysia's 25%,' Kenanga Research cautioned. In terms of average selling prices, Top Glove said it believes Chinese competitors cannot sustain ultra-low pricing seen during from 2022 to 2023. 'The group estimates that break-even prices for Chinese glove makers are at US$14 to US$15 per 1,000 pieces compared with efficient Malaysian producers at US$15 to US$16,' the research house said. Kenanga Research has maintained its 'outperform' call on Top Glove with an unchanged target price of 93 sen, citing the group's scale and improving utilisation as factors for better margins and competitiveness in the critical US market.
New Straits Times
30-06-2025
- Business
- New Straits Times
Top Glove outlook remains weak as industry challenges persist: analysts
KUALA LUMPUR: Top Glove Corp Bhd's earnings outlook is likely to remain under pressure, with industry challenges expected to persist into the second half of 2025 (2H25), analysts said. RHB Research said Top Glove Corp reported third quarter (Q3) financial year 2025 (FY25) core loss of RM2.3 million, bringing 9MFY25 core loss to RM0.9 million. The firm said that results were below its expectation due to the challenging cost pass-through despite a sequential improvement in volume sold. "We expect industry headwinds to persist into 2H25 due to a higher operating cost environment and intensified competition," it said in a note. On the same note, Public Investment Bank Bhd (PublicInvest) remains cautious on Top Glove's operating landscape, weighed down by persistent pricing pressure and a sluggish demand recovery. The firm noted that the stable-to-declining trend in raw material prices is expected to further cap any upward adjustment to average selling price (ASPs). "At this juncture, earnings visibility remains weak due to tariff uncertainty and an imbalance demand-supply dynamic," it said. Meanwhile, Hong Leong Investment Bank Bhd (HLIB) expects Top Glove to register a flattish quarter on quarter (QoQ) results in Q4 FY25. Looking ahead, HLIB said the sector remains clouded by heightened uncertainty around the supply- demand dynamics heading into 2026 and beyond, worsened with elevating operating costs. "Given upbeat results, we revise our FY25 from a loss of RM1.3 million to a profit of RM21.3 million. "However, we cut our FY26 to FY27 by 4 per cent/ 31 per cent following lower ASP assumptions to reflect the weakening outlook. HLIB has maintained its 'Sell' recommendation and lowered its target price to 60 sen.
The Star
26-06-2025
- Business
- The Star
Top Glove expects more orders after tariffs clarity
Top Glove managing director Lim Cheong Guan. PETALING JAYA: Top Glove Corp Bhd is banking on clearer US tariff policies and improving plant utilisation rates to support its earnings recovery, even as average selling prices (ASPs) remain under pressure amid stiff market competition and volatility in raw material cost. Top Glove managing director Lim Cheong Guan said market uncertainties and increased competition led to a downward adjustment in ASPs for nitrile and natural rubber gloves by 5% and 3%, respectively, in the third quarter of financial year ended May 31, 2025 (3Q25). The price adjustments were made in response to declining raw material costs to enable cost past-through and maintain price competitiveness. 'The third quarter was marked by uncertainty and competition stemming from the tariff developments. On April 1 when the tariff was announced, it resulted in temporary order deferrals and cancellations by some US customers who had not anticipated the added cost. This negatively impacted sales volume in the month of April. 'However, following the tariff revision to 10%, strong order inflows from the United States resumed, driving a strong 24% quarter-on-quarter sales volume growth to the United States market. 'On the other hand, competition intensified in Europe as Chinese manufacturers facing restricted access to the United States market shifted their focus there,' he said in a virtual result briefing for 3Q25 yesterday. For 3Q25, Top Glove saw a 31% drop in net profit year-on-year (y-o-y) to RM34.7mil or earnings per share of 0.43 sen. Revenue on the other hand rose by 30% y-o-y to RM830.3mil. For the nine month period of financial year ended May 31, 2025 (9M25), the group's net profit was up y-o-y to RM70.5mil from a loss of RM58.2mil previously. The company recorded a 55% increase y-o-y in revenue for 9M25 to RM2.6bil. On a quarter-on-quarter basis, sales volume increased by 4% despite a 6% decline in revenue due to lower ASPs and a weaker US dollar. Cheong Guan added the slight decline in ASPs also reflects falling raw material costs where nitrile and natural rubber prices are expected to decline by close to 14%. He also anticipates more orders to flow in once there is more clarity of the tariff policy. 'During this period, we do share some of these cost savings with our customers as well. 'However, we also believe that once the tariff policies are finalised, our customers will be able to place orders with more certainty, without worrying that the tariff rate might go up to say 20%, which would result in higher import costs compared with 10% right now,' he said.
The Star
26-06-2025
- Business
- The Star
Top Glove's 3Q earnings slip amid headwinds
KUALA LUMPUR: A volatile market and uncertain trade environment chipped away at Top Glove Corp Bhd 's earnings in the third quarter ended May 31, 2025, despite a jump in revenue on a year-on-year comparison. "Our 3QFY2025 performance was impacted by pronounced headwinds, chiefly lower average selling prices, heightened competition, coupled with cost savings pass through. "However, it is encouraging that we have remained profitable while successfully delivering volume growth," said managing director Lim Cheong Guan in a statement announcing the glovemaker's quarterly result. According to the stock exchange filing, Top Glove posted a net profit of RM34.75mil, which was down from RM50.67mil in the year-ago quarter, attributed to increased competition and the weakening of the US$ against the ringgit. Top Glove had also registered a higher gain from land disposals in the year-ago quarter, which was absent in the current quarter. In line with the lower bottomline, earnings per share dipped to 0.43 sen from 0.63 sen previously. Revenue, however, rose to RM830.25mil from RM636.88mil, driven by a 45% increase in sales volume. For the cumulative nine-month period, the group's net profit was RM70.5mil, which compared favourably to a net loss of RM58.24mil in the year-ago period, while revenue rose to RM2.6bil from RM1.68bil in the comparative period. 'We believe the long-term outlook is still promising as gloves are an essential item across multiple sectors, which will drive sustained global demand. "We are also committed to delivering value to our stakeholders, while staying true to our principles of responsible and sustainable growth. These will enable us to navigate a volatile landscape while capitalising on emerging opportunities," said Lim.
New Straits Times
26-06-2025
- Business
- New Straits Times
Top Glove's Q3 earnings dip 31pct despite surge in sales volume and revenue
KUALA LUMPUR: Top Glove Corp Bhd's net profit for the third quarter ended May 31, 2025, dropped 31 per cent year-on-year to RM34.7 million, mainly due to heightened competition and the weakening of the US dollar against the ringgit. In a filing with Bursa Malaysia, the glove maker noted that the corresponding quarter a year earlier had also benefited from a higher gain from land disposals. Despite the lower earnings, quarterly revenue rose 30 per cent to RM830.3 million from RM636.9 million, driven by a 45 per cent increase in sales volume, reflecting continued global demand recovery. Earnings per share for the quarter stood at 0.43 sen, down from 0.63 sen a year ago. No dividend was declared for the quarter under review. Top Glove said the average selling price (ASP) of gloves remained competitive, while raw material costs trended lower quarter-on-quarter. The average natural latex concentrate price fell nine per cent, while nitrile latex was down four per cent. For the cumulative nine-month period, net profit surged to RM70.5 million from a net loss of RM58.2 million in the same period last year, buoyed by a 55 per cent jump in revenue to RM2.6 billion and a 65 per cent rise in sales volume. Managing director Lim Cheong Guan said the third-quarter performance was impacted by pronounced headwinds, chiefly lower ASPs, heightened competition and cost savings being passed through to customers. "However, it is encouraging that we have remained profitable while successfully delivering volume growth," he said in a statement. "Moreover, our cumulative nine-month performance continues to track steadily towards pre-Covid levels, which is more reflective as quarterly results can be more volatile due to the effects of headwinds and tailwinds. "These speak to the effectiveness of our continuous focus on quality improvement and cost efficiency, as well as our agility in responding to shifting market dynamics," he added. Top Glove ended the quarter with RM305.2 million in cash and bank balances, down from RM351.2 million at the start of the financial year. Total liabilities rose to RM1.65 billion from RM1.12 billion as at end-August 2024, mainly due to the issuance of an RM800 million senior sukuk to refinance its perpetual sukuk. Despite global uncertainties, Lim remained optimistic about long-term prospects. "We believe the long-term outlook is still promising as gloves are an essential item across multiple sectors, which will drive sustained global demand. "We are also committed to delivering value to our stakeholders, while staying true to our principles of responsible and sustainable growth," he said. Top Glove also highlighted its environmental, social and governance (ESG) recognition, having achieved a score of 4.1 out of 5 in the FTSE ESG Ratings, placing it among the top 10 per cent of over 700 companies assessed in the global healthcare segment.
