Lower quarterly loss anticipated for Top Glove

RHB Research said the glove maker could deliver a core loss of RM40mil to RM45mil in 3Q24 from a core loss of RM66mil in 2Q24.

PETALING JAYA: Top Glove Corp Bhd is anticipated to reduce its losses in the third quarter of financial year 2024 (3Q24) on improving investor sentiment from favourable operating dynamics.

RHB Research pointed out that the glove maker could deliver a core loss of RM40mil to RM45mil in 3Q24 from a core loss of RM66mil in 2Q24, underpinned by a few factors.

They include improving operating efficiency on expectations of a higher plant utilisation rate, and recovery in the average selling price (ASP).

The catalysts could be offset by the recent 5% to 6% uptick in natural gas tariff and escalation of raw material prices including the 12% hike in natural latex price and 3.6% rise in acrylonitrile price, the research house said.

Top Glove is scheduled to report its 3Q24 results today.

The research house, which upgrading the stock to a “buy” from “neutral”, said the industry operating dynamics had turned favourable for glove manufacturers as customers are more receptive to the ASP increase in the coming months.

“On the other hand, we understand that Chinese glove makers have also raised their ASPs to between US$17 and US$18 from US$15 and US$16 according to our channel checks,” it added.

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