PETALING JAYA: Kenanga Research remained “underweight” on the glove sector as overcapacity in the industry will continue dragging the glove players to face weak demand and high input costs.
“While some players have returned to the black since the third quarter of calendar year 2023 (3Q23), albeit with only some small profits, we believe the sector will continue to face volatile earnings ahead, no thanks to weak demand and stubbornly high nitrile butadiene rubber prices.
“The industry expects volatile quarterly sales orders as distributors and buyers see no urgency to place sizeable orders or hold substantial stocks as supply is plentiful and readily available,” it said.
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