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this month would release result quarter ended Feb 2024. looking at Malayan cement and Hume cement results, Esceramics yet to deliver the higher revenue and profit from construction biz. As the two big players already delivered higher result for Q3 and Q4 2023, should there is a delay to smaller player such as Esceramic, this quarter should reflect a better revenue and profit.
The higher revenue achieved in FY2023 were driven by building materials segment though the margins were lower; evermix if you will. Year 1 profit guarantee post acquisition met the target and not expecting negative surprises for Year 2; a total combined profit of 11M for 2 consecutive fiscal year was the condition for the acquisition.
just a small initial position at 0.195, Andy. I liked its balance sheet and still observing the business decisions particularly Evermix. It seems to be a good business decisions so far but will probably be tested on the 3rd year. First two year comes with profit guarantee :) Hence, there is no rush.
KUALA LUMPUR (May 14): Malaysian rubber glove manufacturers, which have suffered from lower average selling prices caused by intensive competition, may be able to export more to the US as its president Joe Biden raises the tariffs on Chinese rubber medical and surgical gloves from 7.5% to 25% in 2026, among others. With the tariff hike, Chinese gloves will be more expensive in about two years compared to now.
While Malaysia has some of the world’s largest glovemakers, their pricing power has been diminishing due to competition from Chinese players who make cheaper gloves, hurting the margins of Malaysian glove manufacturers.
Consequently the Malaysian glove industry has been operating at a low utilisation rate below 50% due to an enduring oversupply of gloves, while the overall sales volume has declined year-on-year. In contrast, Chinese glove players are still running at near full capacity, according to a note by PublicInvest Research in February.
Based on the research firm's channel checks, Chinese players are currently selling about US$2 (RM9.47) per 1,000 pieces cheaper than their Malaysian counterparts, pricing their products at US$16-US$18 per 1,000 pieces.
As is, there are still growing calls to increase the tariffs from 25% to 50%. If the tariffs leads to higher demand for Malaysian gloves, this will also lead to higher glove formers for esceram which is a higher margins segment.
Stuck? Its better to move up gradually :) After all, esceram is not gloves manufacturers but glove manufacturers definitely needs glove formers due to wear and tear and quality requirements for medical gloves.
Esceramic even during pandemic would only catch up later in the rally as esceramic isn't the direct gloves manufacturer but former supplier to the glove industry..
the tariffs is in placed for two years. That means China gloves will be expensive compared to other glove makers. This bodes really well for Esceram and the market where it is supply the formers; beyond Malaysian glove manufacturers :) As for Malaysian glove makers, probably the top 4 will benefit the most as I doubt other small glove makers are supplying to US market.
