Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/top-glove-corp-bhd" target="_blank" data-smartkarma-citation="entities:20759:1" rel="noopener">Top Glove Corp (TOPG MK)</a> achieved 16% QoQ revenue growth in 3QFY24, on 13% sequential volume increase and higher ASP. 3QFY24 operational loss reduced to RM34M from RM59M in 2QFY24.</li>
<li>Considering the current demand and supply condition, Top Glove expects the ASP to further increase. The company aims to recover its EBITDA margin to pre-pandemic levels of 15% by FY26.</li>
<li>With rising import alert and expected tariff increase on Chinese manufacturers, the US demand may shift from China to Malaysia. Top Glove is poised to benefit from potential trade diversion.</li>
</ul>



Top Glove Corp (TOPG MK) achieved 16% QoQ revenue growth in 3QFY24, on 13% sequential volume increase and higher ASP. 3QFY24 operational loss reduced to RM34M from RM59M in 2QFY24.
Considering the current demand and supply condition, Top Glove expects the ASP to further increase. The company aims to recover its EBITDA margin to pre-pandemic levels of 15% by FY26.
With rising import alert and expected tariff increase on Chinese manufacturers, the US demand may shift from China to Malaysia. Top Glove is poised to benefit from potential trade diversion.


Top Glove Corp (TOPG MK): Volume and ASP Growth Achieved in 3QFY24; Sees Higher Global Demand Ahead

ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

ASEAN Insight Provider

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Cross Asset Strategy

<ul>
<li>The Week That Was in ASEAN@Smartkarma is filled with an eclectic mix of differentiated, substantive, and actionable insights, macro and equity bottom-up, from across South East Asia.</li>
<li>The past week saw insights on <a href="https://www.smartkarma.com/entities/berli-jucker-public-co-ltd" target="_blank" data-smartkarma-citation="entities:3685:1" rel="noopener">Berli Jucker</a> in Thailand, as a beneficiary of tourism recovery plus on <a href="https://www.smartkarma.com/entities/supermax-corp-bhd" target="_blank" data-smartkarma-citation="entities:12883:1" rel="noopener">Supermax Corp</a>, <a href="https://www.smartkarma.com/entities/halcyon-agri-corp-ltd" target="_blank" data-smartkarma-citation="entities:18191:1" rel="noopener">Halcyon Agri</a>, and <a href="https://www.smartkarma.com/entities/pt-trimegah-bangun-persada-tbk-harita-nickel" target="_blank" data-smartkarma-citation="entities:36826:1" rel="noopener">PT Trimegah Bangun Persada (Harita Nickel).</a>
</li>
<li>There was also a macro insight on the Philippines, with exposure falling to record lows for active PMs, and a sector piece on S-REITS in light of rising interest rates.</li>
</ul>


The Week That Was in ASEAN@Smartkarma is filled with an eclectic mix of differentiated, substantive, and actionable insights, macro and equity bottom-up, from across South East Asia.
The past week saw insights on Berli Jucker in Thailand, as a beneficiary of tourism recovery plus on Supermax Corp, Halcyon Agri, and PT Trimegah Bangun Persada (Harita Nickel).

There was also a macro insight on the Philippines, with exposure falling to record lows for active PMs, and a sector piece on S-REITS in light of rising interest rates.


The Week That Was in ASEAN@Smartkarma - Berli Jucker and Tourism, Harita Nickel IPO, and S-REITS

<ul>
<li>
<a href="https://www.smartkarma.com/entities/supermax-corp-bhd" target="_blank" data-smartkarma-citation="entities:12883:1" rel="noopener">Supermax Corp (SUCB MK)</a> reported first-ever quarterly loss in Q2FY23 due to continued fall in rubber gloves ASP, rising input cost, and weakening of the USD against the local currency.</li>
<li>The challenging operating environment for glove will persist into 2023. Amid continued weak global demand for gloves, declining ASP, and rising input cost, Supermax will take time to regain profitability.   </li>
<li>Global demand for rubber gloves is not expected to recover soon. In the foreseeable future, the market will remain weak, competition continue to be intense, and profitability adversely impacted.</li>
</ul>



Supermax Corp (SUCB MK) reported first-ever quarterly loss in Q2FY23 due to continued fall in rubber gloves ASP, rising input cost, and weakening of the USD against the local currency.
The challenging operating environment for glove will persist into 2023. Amid continued weak global demand for gloves, declining ASP, and rising input cost, Supermax will take time to regain profitability.   
Global demand for rubber gloves is not expected to recover soon. In the foreseeable future, the market will remain weak, competition continue to be intense, and profitability adversely impacted.


Supermax Corp (SUCB MK): Gloves ASP Decline and Rising Input Costs Lead to Gloomy Business Outlook

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/ql-resources-bhd" target="_blank" data-smartkarma-citation="entities:11221:1" rel="noopener">Ql Resources (QLG MK)</a> and <a href="https://www.smartkarma.com/entities/ammb-holdings-bhd" target="_blank" data-smartkarma-citation="entities:137:1" rel="noopener">AMMB Holdings (AMM MK)</a> could replace <a href="https://www.smartkarma.com/entities/hartalega-holdings-bhd" target="_blank" data-smartkarma-citation="entities:10230:1" rel="noopener">Hartalega Holdings (HART MK)</a> and <a href="https://www.smartkarma.com/entities/top-glove-corp-bhd" target="_blank" data-smartkarma-citation="entities:20759:1" rel="noopener">Top Glove Corp (TOPG MK)</a> in the <a href="https://www.smartkarma.com/entities/kuala-lumpur-composite-index" target="_blank" data-smartkarma-citation="entities:22913:1" rel="noopener">Kuala Lumpur Composite Index (KLCI) (FBMKLCI INDEX)</a>.</li>
<li>If the changes go through, glove makers will have no representation in the index. At one point in 2020, glove makers made up nearly 20% of the <a href="https://www.smartkarma.com/entities/kuala-lumpur-composite-index" target="_blank" data-smartkarma-citation="entities:22913:1" rel="noopener">FBMKLCI INDEX</a>.</li>
<li>One-Way turnover at the rebalance will be around 3% and the impact of passive trading will be higher on the inclusions as compared to the deletions.</li>
</ul>



Ql Resources (QLG MK) and AMMB Holdings (AMM MK) could replace Hartalega Holdings (HART MK) and Top Glove Corp (TOPG MK) in the Kuala Lumpur Composite Index (KLCI) (FBMKLCI INDEX).
If the changes go through, glove makers will have no representation in the index. At one point in 2020, glove makers made up nearly 20% of the FBMKLCI INDEX.
One-Way turnover at the rebalance will be around 3% and the impact of passive trading will be higher on the inclusions as compared to the deletions.


KLCI Index Rebalance Preview: No More Glovemakers in the Index (Or How the Mighty Have Fallen)

Sri Trang Gloves Thailand  / Equity Bottom-Up

<ul>
<li>As continued strong market competition and excess capacities from major players have capped upward trajectory for ASP, key global glove manufacturers have revised their capex plans lower.</li>
<li>To reflect the current industry climate, Sri Trang expects to reach an annual production capacity of 56.6 billion pieces in 2024 from 81.9 billion pieces earlier.</li>
<li>The company aims to launch surgical gloves, which command a high margin, in the domestic market in Q4 2022.</li>
</ul>


As continued strong market competition and excess capacities from major players have capped upward trajectory for ASP, key global glove manufacturers have revised their capex plans lower.
To reflect the current industry climate, Sri Trang expects to reach an annual production capacity of 56.6 billion pieces in 2024 from 81.9 billion pieces earlier.
The company aims to launch surgical gloves, which command a high margin, in the domestic market in Q4 2022.


Sri Trang Gloves (STGT TB): Revised Capacity Expansion Plan to Arrest Downfall in ASP

Malaysia

Careplus Group Berhad is an investment holding company. The Company's subsidiaries manufacture, process, and trade gloves, including latex, nitrile, and vinyl gloves. Careplus Group also provides other disposable protection products such as facemasks, respirators, gowns, and caps.

Adventa Berhad is an investment holding company. The Company, through its subsidiaries, manufactures and distributes sterile surgical and medical examination gloves as well as distributes medical and hospital related products. Adventa also generates and supplies energy and electricity using biomass technology.

Kossan Rubber Industries Berhad manufactures and sells rubber products. Through its subsidiaries, the Company also manufactures and trades latex examination gloves as well as fabricates and installs machinery.

TMC Life Sciences Bhd provides health care services.  The Company offers human infertility consulting and treatment services.

Pharmaniaga Berhad is an investment holding company.  The Company, through its subsidiaries, manufactures, markets, and distributes pharmaceutical and medical products to government hospitals and private institutions. Pharmaniaga also provides web portal services for online trading of health care products.

Focus Point Holdings Bhd owns and operates eye care centers. The Company also franchises eye care centers and provides medical eye care surgery and services.

Hartalega Holdings Bhd. manufactures a wide range of latex gloves. The Company's products include natural rubber examination gloves, nitrile examination gloves, nitrile clean room gloves and natural rubber surgical gloves.

Top Glove Corporation Bhd manufactures a wide range of latex gloves.  The Company's products include latex examination powdered, latex examination powderfree, nitrile examination gloves,soft nitrile examination gloves, vinyl examination gloves, surgical gloves, and other related products.

Apex Healthcare Berhad is an investment holding company.  The Company, through its subsidiaries, manufactures, distributes, and retails pharmaceutical products.

UEM Edgenta Berhad is an investment holding company which provides management services. Through its subsidiaries, the Company provides hospital support services, hotel management services, develops hotels, and operates as a hotel proprietor. UEM also develops and manages properties.

Orthofix Medical Inc. develops, produces, and markets medical devices. The Company offers spine fixation, biological, and other orthopedic and spine solutions. Orthofix Medical serves the healthcare sector worldwide

NAGAILEBEN CO., LTD. manufactures and sells clothing for the medical industry including antibacterial and antistatic type medical clothing.  The Company also sells shoes, caps, and related goods for doctors, nurses, and patients.

NIKKISO CO., LTD. operates industrial and medical business.  Industrial business includes manufacturing industrial pumps such as non-seal, metering, and cryogenic pumps while medical, manufacturing water conditioning systems for power plant and aerospace composite components.  Medical business includes manufacturing Hemodialysis machine and related devices.

Taidoc Technology Corp develops and manufactures blood glucose monitoring systems, blood pressure monitoring systems, blood glucose plus pressure monitoring systems, ear & forehead thermometers, and strip designing & processing, as well as advanced regulatory & business consulting services.

iRadimed Corp provides non-magnetic intravenous infusion pump systems for use during magnetic resonance imaging procedures.

EIKEN CHEMICAL CO., LTD. manufactures clinical reagents, contrast media used for X-rays, and medical and testing equipment.  The Company also wholesales and manufactures office automation equipment and operates insurance agency.

SHOFU INC. manufactures materials used for dental treatment.  The Company also wholesales dental equipment.  Shofu's products include artificial teeth, dental abrasives, dental stone, metal products, and endodontic instruments and materials.

Modern Dental Group Ltd is a dental prosthetic device provider. The Company supplies fixed prosthetic devices, removable prosthetic devices, and others. Modern Dental serves customers worldwide.

Guerbet manufactures contrast media for radiology and magnetic resonance imaging.

Stratec SE provides automation solutions in the fields of vitro diagnostics and life sciences. The Company offers fully automated analyzer systems, software for laboratory data management, and smart consumables. Stratec serves customers worldwide.

Supermax Corporation Berhad is an investment holding company whose subsidiaries manufacture, sell, and export various type of latex gloves around the world.

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Supermax Corp (SUCB MK)

Top Glove Corp (TOPG MK): Volume and ASP Growth Achieved in 3QFY24; Sees Higher Global Demand Ahead

Top Glove sees revenue growth in 3QFY24, on higher sales volume and ASP. The company will benefit from potential trade diversion due to rising...

Tina Banerjee

The Week That Was in ASEAN@Smartkarma - Berli Jucker and Tourism, Harita Nickel IPO, and S-REITS

The Week That Was in ASEAN@Smartkarma is filled with an eclectic mix of differentiated, substantive, and actionable insights, macro and equity...

Angus Mackintosh