The world’s largest glove maker’s shares hit a record high of 88 sen this morning before paring its gains at 84 sen, 5.5 sen (7.01%) higher than yesterday’s close.
Its market capitalisation stood at RM6.85 billion.
Another glove maker, Hartalega, also saw a surge in interest, peaking at RM2.22 before retreating to RM2.10 at the time of writing, four sen (1.9%) higher than yesterday’s close.
It was the 18th-most actively traded stock, with over 24.6 million shares exchanging hands. Hartalega had a market valuation of RM7.3 billion.
Supermax Corp Bhd and Kossan Rubber Industries Bhd – also glove makers – performed relatively well, reaching a high of 85 sen and RM1.43 respectively.
Supermax pared its gains to close 3.5 sen (4.43%) higher at 82 sen, while Kossan remained unchanged at RM1.38 as at 4.40pm. Each had a market capitalisation of RM2.23 billion and RM3.5 billion respectively.
Recovery in sight
Rakuten Trade Sdn Bhd vice-president of equity research Thong Pak Leng has noted that the glove-making industry is currently plagued by massive oversupply, according to a report by The Edge.
However, he anticipates the sector to make a recovery in another one to two years, predicting the present rally is sustainable in the medium- term.
Meanwhile, Kenanga Research said in a note yesterday it expects the glove oversupply situation to be less acute and gradually improve, following signs of players culling production capacity via the decommissioning of selected plants.
The research house estimates the glove demand and supply situation to head towards equilibrium in 2025 when new on-stream capacity falls completely. Global demand has also risen by 15% per annum due to rising hygiene awareness.
Regarding analysts’ stock recommendations, Top Glove currently has one “buy”, seven “hold”, and 14 “sell” calls with a consensus target price (TP) of RM1.82.
Hartalega has four “buy”, five “hold”, and 11 “sell” calls, with a consensus TP of RM2.35.
Supermax holds a consensus TP of RM2.57 and has five “hold” and two “sell” recommendations.
Kossan, lastly, has two “buy”, six “hold”, and nine “sell” calls, with a consensus TP of RM2.24.