KUALA LUMPUR, Sept 8 (Bernama) -- Bursa Malaysia closed almost flat on Tuesday as buying interest rotated away from index heavyweights towards smaller-cap construction stocks, with sentiment affected by geopolitical uncertainty, said an analyst. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 0.39 of a point to 1,714.40 from Monday’s close of 1,714.79. The benchmark index opened 1.65 points lower at 1,713.14 and moved between 1,710.44 and 1,714.50 throughout the trading session. The broader market was almost evenly balanced, with decliners leading gainers 548 to 546, while 598 counters were unchanged, 1,107 were untraded and 25 were suspended. Turnover expanded to 4.13 billion units valued at RM3.14 billion from 3.60 billion units valued at RM2.45 billion on Monday.
Top Glove Corporation Bhd (Top Glove) is making a strong comeback in the U.S. market, regaining momentum that could help reverse the sluggish glove sector sentiment. According to Kenanga Research’s latest update, the glove maker is seeing a surge in U.S. orders, now accounting for 30% of total volume — and it's aiming for 40% within two years.
Despite global trade headwinds and tariff-related uncertainties, Top Glove is expected to post double-digit sales growth in 4QFY25, thanks to recovering U.S. demand. This comes as its plant utilization rate climbs to 65%, up from 61% last quarter.
Outlook: Positive Momentum Building
Sales Volume Growth: Targeting a 15% quarter-on-quarter growth in 4QFY25.
U.S. Pricing Edge: Despite recent reciprocal tariffs, Malaysian gloves remain 10–30% cheaper than Chinese counterparts in the U.S. market.
Production Ramp-Up: The extra 300 million pieces per month could boost quarterly revenue by RM70 million.
ASP Pressure Easing: A clearer view of U.S. tariff policies could trigger higher ASP (average selling price), improving margins.
Risks to Watch
Aggressive pricing from Chinese players via Indonesian facilities (which enjoy a lower 19% U.S. tariff) could weigh on Malaysian players.
Potential changes in tariff structures could alter the playing field.
A prolonged price war could pressure margins if rivals continue to sell below cost.
Investment Call: OUTPERFORM
Kenanga maintains its Target Price (TP) of RM0.93, based on 1.6x FY26F BVPS. At the current price of RM0.70, the stock is trading at a deep discount — 2 standard deviations below its 1-year forward average.
For investors looking for a rebound play in the glove sector, Top Glove presents an interesting case: higher U.S. demand, improving utilization, and pricing resilience. As global healthcare demand normalizes post-pandemic, Top Glove could regain footing as a global market leader.
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