PETALING JAYA: Top Glove Corp Bhd
is expected to carry stronger earnings momentum into financial year ending Aug 31, 2027 (FY27), supported by higher utilisation, firmer average selling prices (ASPs) and a more balanced glove market.
Its production capacity is also set to expand, although analysts remain divided over whether the recent earnings recovery can be sustained amid persistent global oversupply and competition.
TA Research expects Top Glove to achieve 10% profit growth in FY27, with management targeting a sustainable pre-tax profit margin of 8% to 12% as the industry moves towards a more rational operating environment.
“We note that natural gas prices are expected to increase by around 30% from October 2026, with the higher costs expected to be passed through to customers,” it said.
The research house raised its FY27 and FY28 net profit forecasts to RM339.1mil and RM358.9mil, respectively, from RM183.1mil and RM197.9mil previously, after incorporating FY26 numbers and raising its ASP assumptions by 14.1%.
Nevertheless, TA Research retained its “sell” call on Top Glove, with a target price of 75 sen based on 1.2 times FY27 price-to-book (P/B).
CIMB Research was also cautious, reiterating its “reduce” call while raising its target price to 70 sen from 63 sen, based on an unchanged 1.1 times 2027 forecast P/B, or one standard deviation below its three-year historical mean.
It said ASPs had peaked at US$27 and US$29 per 1,000 pieces in June 2026 for latex powder-free and nitrile gloves, respectively, before normalising to US$18 and US$22 in August.
“While we do not expect ASPs to return to the June peaks of US$27 to US$29 per 1,000 pieces, near-term pricing is likely to remain elevated following the company’s decision to increase blended ASPs by US$2 to US$2.5 per 1,000 pieces in September 2026, resulting in a blended ASP range of US$20 to US$24 per 1,000 pieces,” it further said.
CIMB Research believes future earnings growth has largely been priced in, with Top Glove trading at 1.4 times P/B, while global glove capacity remains above 500 billion pieces against estimated demand of about 400 billion pieces for 2026 to 2027.
In contrast, BIMB Research upgraded Top Glove to a “buy” with a sharply higher target price of RM1.30 from 75 sen, using 25 times forward earnings.
“We turn more constructive going into FY27, though we would not annualise the exceptional fourth-quarter margin,” it said, adding that the company enters FY27 from a structurally stronger earnings base and healthier supply-demand conditions.
Top Glove posted a net profit of RM307.96mil in FY26, up sharply from RM105.33mil in FY25, while revenue rose to RM4.23bil from RM3.49bil.
Meanwhile, an analyst said Top Glove’s earnings recovery should remain supported by firmer utilisation and better ASPs, although the pace of improvement will depend on how quickly industry supply-demand conditions normalise.
“The key near-term catalyst is stronger operating leverage as volumes recover, but investors will continue to watch raw material costs and global capacity levels closely,” he told StarBiz.
