bullish
Top Glove Corp (TOPG MK): Volume and ASP Growth Achieved in 3QFY24; Sees Higher Global Demand Ahead
567 Views20 Jun 2024 18:57
Boomeranged on Tue, 17 Sep 2024 14:25
The U.S. will raise tariffs on Chinese medical and surgical gloves to 50%, from 7.5% currently, in January 2025 and to 100% by January 2026. As a leading glove manufacturer, Top Glove will be a prime beneficiary of this move by regaining market share from Chinese manufacturers. We expect accelerated revenue growth and improved profitability.
SUMMARY
- 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.
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Tina Banerjee
Global Healthcare Analyst
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