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Seorang ahli perniagaan yang semalam dihadapkan ke mahkamah atas tuduhan memukul dan mengugut dua pengawal peribadinya menggunakan pistol, sekali lagi didakwa di Mahkamah Majistret di sini hari ini, atas empat tuduhan memukul mangsa sama.
Chung xxxxxxxxx 44, bagaimanapun mengaku tidak bersalah selepas pertuduhan ke atasnya dibacakan jurubahasa di hadapan Majistret Mohamad Fared Abdul LatiLatif….this reported Bernama
23/04/2021 17:11 MYT
Malaysia's rubber glove exports to hit new record high this year, says Plantation Ministry
KUALA LUMPUR (Nov 5): Malaysia's rubber glove export is expected to climb 16% to a new record of RM13.7 billion in 2024, following the historic high of RM11.8 billion achieved in 2023, said Deputy Plantation and Commodities Minister Datuk Chan Foong Hin.
Rubber glove exports constituted 42.8% of the total rubber industry's exports of RM27.8 billion in 2023, Chan said.
"Of the total rubber glove exports in 2023, approximately 35% are sent to the US," Chan told the lower house of Parliament during the oral answer session on Tuesday.
Chan also expressed optimism that Malaysia's rubber glove industry will regain market share in the US following the imposition of higher tariffs on Chinese imports.
The higher tariffs, announced in September 2024 by the US Trade Representative, will see import duties on Chinese-made medical gloves jump to 50% in 2025 and further to 100% by 2026, a significant increase from the current 7.5% tariff.
Malaysia's rubber glove market share in the US stands at 44% currently, down from the average 55% recorded from 2020 to 2023.
"We view the US's move positively, as it will raise Chinese glove prices and make Malaysian gloves more competitive," Chan said.
Meanwhile, the government, through the Malaysian Rubber Council (MRC), will intensify efforts to promote rubber gloves at major US trade shows, such as the Florida International Medical Expo and the International Restaurant & Food Service Show in New York, he said.
The MRC will also promote natural rubber gloves and provide grants under the Automation and Green Technology Fund to help modernise glove production, he added.
PETALING JAYA: The re-emergence of the “US-premium” in the pricing for rubber gloves may allow Hartalega Holdings Bhd to fully pass on the recent foreign-exchange impacts faced by the group and allow for margin improvement.
Hartalega’s revenue exposure to the United States, which was about 40% to 50%, is expected to rise to 60% to 70% from January 2025 onwards, said Hong Leong Investment Bank Research (HLIB Research).
The glove maker is expected to deliver stronger sequential earnings from the third quarter its financial year 2025 (3Q25) or even 4Q24 onwards.
HLIB Research maintained its earnings forecasts for Hartalega’s financial years 2025 to 2027, as it believes the upcoming weaker 2Q25 performance will be offset by a stronger 4Q25.
This would be due to the result of passing on the recent US dollar weakness to its US customers (such as higher average selling price), together with margin expansion, especially from December 2024 onwards.
The research house maintained a “buy’’ call on Hartalega with an unchanged target price of RM3.62 a share.
HLIB Research also said Hartalega provided guidance that the latest pricing of generic medical nitrile rubber gloves would remain competitive in non-US markets at US$18 to US$19 per 1,000 pieces since May 2024 due to ongoing Chinese competition.
Chinese manufacturers are currently selling at US$16 to US$17 per 1,000 pieces.
Sales volumes would improve sequentially from 1.9 billion to two billion pieces per month in 2Q24 to 2.1 billion to 2.2 billion pieces per month. It will further increase to 2.3 billion to 2.4 billion pieces per month in 4Q24.
The improvement in 4Q24 would mainly be boosted by the tariff-led trade diversion from US customers.
The research house said Hartalega is able to differentiate itself from its local peers due to its reputable brand name as one of the listed Big-Four in Malaysia, consistent business relationship with US buyers and relatively higher exposure to North America compared with its major listed peers.
HLIB Research added the glove maker believes the premium would be more significant for its December 2024 orders, ahead of the US tariff increase from the existing 7.5% to 50% effective January 2025, which makes it less economically feasible for Chinese players to produce for the US customers.
Hartalega had been quoting its December 2024 orders at US$22 to US$23 per 1,000 pieces, versus US$24 to US$26 per 1,000 pieces in the pre-pandemic era, for its US customers, subject to acceptance, the research house said.
HLIB Research said the price point implies a premium of US$3 to US$4 per 1,000 pieces compared with its customers outside the United States, in order to fully pass on recent forex impacts faced and potentially expand its margins.
For 4QFY2024, the Group posted Sales Revenue of RM835 million, representing a 75% increase from 4QFY2023 and charted Profit After Tax of RM8 million, which is a substantial improvement of 102% year on year, supported by enhanced operational efficiency as well as land disposal gains. The 4QFY2024 Sales Volume also saw exceptional growth of 91% versus 4QFY2023. On a 12 months basis, the Group registered Sales Revenue of RM2.52 billion, an uptick of 11% from FY2023. Loss After Tax which factored in gains from land disposal, reduced considerably to RM18 million, a commendable upsurge of 98% against FY2023. Meanwhile, the Group’s full year EBITDA turned positive at RM251 million, recording an improvement of 261% compared with FY2023. The full year Sales Volume rose by 19% from FY2023.
The Group’s notably improved performance was attributed to increased Sales Volume as customers continued to replenish glove inventories, leading to higher utilisation rates and enhanced cost efficiency. The Group saw especially strong growth in the U.S. where Sales Volume soared 120% quarter on quarter, which was further driven by the high number of foreign manufacturers’ gloves being placed on the U.S. FDA’s import alert list. With the impending imposition of high tariffs by the U.S. on China-made medical gloves, the Group anticipates a greater increase in Sales Volume growth in the quarters to come.
The Group’s performance for 4QFY2024 was affected by the sudden drastic weakening of the U.S. Dollar against the Ringgit. In response, the Group has revised its selling prices upward, the effects of which will be realised from November 2024 onwards due to the time lag.
• Maintain OVERWEIGHT; Sector Top Picks: Hartalega (HART) and Kossan Rubber (KRI), and Riverstone (RSTON). Industry operating dynamics remain in favour of the local glove manufacturers on the back of better demand visibility, supply rationalisation, and ASP stabilisation. That said, the recent weakening USD remains a key hindrance. However, we expect the flow through impact from trade diversion arising from the hike in US import tariff on China (from 2025) to have a net positive effect on the earnings of rubber products companies under our coverage (see our previous report).
• ASP. Industry-blended ASPs are currently hovering at USD20-21/1,000 pieces (pcs), improved slightly from USD20/1000 pcs in 2Q24. According to our channel checks, China glove makers’ ASPs now range between USD18- 19/1,000 pcs, higher from USD17-18 from the previous quarter. That said, we understand that local glove makers are in discussions to pass on the effects of a weakening USD to customers of at least USD1. This would result in the ASP range of within USD21-22 by 4Q24.
• Demand.Malaysia’sglovesexportvolumesurged66%MoMand105%YoYin August, outpacing the growth in July (+12% MoM; +43% YoY). Export value surged 15% MoM and 51% YoY to MYR1,583m. Meanwhile, China’s gloves exports grew 5% in August following a 3% MoM contraction in July. That said, we expect 2024 global glove demand growth of 22% (Figure 3) premised on the recovery of glove restocking activities in 2H24. That said, Malaysian Rubber Glove Manufacturers Association (MARGMA) expects global gloves demand to chart a CAGR growth of 10% to 450bn pieces from 2023-2027.
• Supply. We gather that local manufacturers are running within the range of 70-80% according to our latest channel checks. That said, we expect a marginal change in global industry supply of 6bn in 2024 on the back of planned capacity replenishment by HART (4bn as a result of the relocation of production lines to NGC1.5 by end 2024), 3bn by Top Glove Corp (TOPG) (on the resumption of previous capacity that was decommissioned temporarily), 0.3bn planned capacity expansion by Sri Trang Gloves (Thailand) offset against by 1.3bn decommission exercise by RSTON.
• MaintainOVERWEIGHT.WemaintainourOVERWEIGHTcallonthesector premised on improving cost-pass-through model and restocking activities materialising in 2H24 (as demand-supply dynamics are expected to achieve equilibrium). The hike in US import tariff on China made products is icing on the cake as we expect this could escalate trade diversion outside China, eventually benefitting Malaysia manufacturers. We favour gloves manufacturers which demonstrate strong earnings resilience, solid balance sheet profile, and higher exposure to nitrile products (as latex prices remain volatile due to recent flooding in Thailand). With that, our sector Top Picks are HART and KRI. We also like RSTON thanks to its above-peer margin performance, unique exposure to cleanroom gloves (which should benefit from the recovery of semiconductor sales), and consistent dividend payout. Key risks are labour shortage, weakening of the USD against MYR, higher- than-expected raw material prices, and slower-than-expected demand recovery.
In a recent meeting with management, we gathered that (i) the pre-pandemic
cost-pass-through mechanism will be back for Nov orders, which is important
under the current volatile forex climate and potential increase in labour costs;
(ii) the plant utilisation rate is anticipated to gradually improve, with US exposure
to be higher than its historical average of 40-50% of revenue, and (iii) the gradual
transition to selling more customised rubber gloves and higher-degree of
automation in new facilities (70% of capacity) within the next 1.5 years; these
will help to lift margins. All in, we maintain our FY24f-26f earnings forecasts and
keep BUY on Kossan with an unchanged TP of RM3.00, based on P/E multiple of
32x on its FY25f EPS
