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lukewong82 Master	23-Nov-2021 08:37        lukewong82 About Contact  Quote this Post!
x 0   x 0  Alert Admin	Just like the covid virus propelled glove sectors to high from a low starting point, the opposite aka antiviral medicine  molnupiravir and others under development by China and other countries may also propel glove sectors back to the starting point. Source: Singapore inks deal for antiviral pill to treat Covid-19 and its variants, Singapore News & Top Stories - The Straits Times Chinese antibody drugs show promise in Covid-19 trials, say researchers, East Asia News & Top Stories - The Straits Times FDA expected to approve Pfizer and Merck antiviral pills - The Washington Post msksmsks      ( Date: 23-Nov-2021 08:29) Posted: Bro,    If u had read my previous postings,  U wl realise that i' ve no issues with opposing views.....In fact, i welcome them to keep me in chk incase overlooked some area being clouded with  extreme pessimism  or optimism .  But no relentless attack which is irritable  One can claim his/her credit once their view is vindicated and proven right....and that' s good...and i respect that Cheers  lukewong82      ( Date: 23-Nov-2021 04:21) Posted: hahaha... why u so scared? If u confident of RS then u should not fear opposing opinions. Only if u already in fear then u start to bother by opposing views :) Cheer
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lukewong82 Master	23-Nov-2021 08:31        lukewong82 About Contact  Quote this Post!
x 0   x 0  Alert Admin	Molnupiravir. The thing that caused the current decline in glove counters' share price. Once approved for use, expect another decline in share price. I just giving my opinion on why glove sectors are hammered. DYODD.  Cheers Longtermer      ( Date: 23-Nov-2021 08:19) Posted: What ASP are you looking at? What revenues and margin you forecast? Imo, glove companies are oversold to way below its value which historicallytraded at 15x PE.. RS has been artificially pressed down by sellers. Good time to look at value buy. Dyodd is paramount.    lukewong82      ( Date: 23-Nov-2021 04:19) Posted: Easy logic. Now share price is 70 cents. So u keep and hope that ASP will recover BUT by the time ASP recovers if any, market becomes a bear market due to a raise in interest rate next year. And with all the antiviral medication potentially coming out, covid may not be the " theme" for next year, next year all talk will be on raise in interest rate. If I am a buyer and I buy RS now hoping that ASP recovers and share price recovers I had to face a few obstacles. 1) Will covid worsen again and cause ASP to rise again with antiviral medication coming onto the scene 2) Will the market remain so bullish next year with interest rate going up? Note that when market turns bearish, almost all counters, no matter how good the counter is, share price will be depressed. 3) When will EPF stop their selling? So many uncertainties. Yes I just voicing my opinions, no problem if u think my opinions are junks :) ... U can go on and continue to load RS big time.  Yes, talk is cheap that' s why this is a free FORUM for users to talk :) Cheers
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msksmsks Supreme	23-Nov-2021 08:29        msksmsks About Contact  Quote this Post!
x 0   x 0  Alert Admin	Bro,    If u had read my previous postings,  U wl realise that i' ve no issues with opposing views.....In fact, i welcome them to keep me in chk incase overlooked some area being clouded with  extreme pessimism  or optimism .  But no relentless attack which is irritable  One can claim his/her credit once their view is vindicated and proven right....and that' s good...and i respect that Cheers  lukewong82      ( Date: 23-Nov-2021 04:21) Posted: hahaha... why u so scared? If u confident of RS then u should not fear opposing opinions. Only if u already in fear then u start to bother by opposing views :) Cheers msksmsks      ( Date: 22-Nov-2021 20:58) Posted: I saw pple popping fm nowhere fanning fear. I saw tow phaw 仙 talking all sorts of theory ...who care Bring it on....who cares. Numbers don lie....but human nature wl Bring out yr numbers to debate else plucking air fm that space Cheers
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Longtermer Elite	23-Nov-2021 08:19        Longtermer About Contact  Quote this Post! Style: Flexible   Yells: "A disciplined investor is a wealthy investor"
x 0   x 0  Alert Admin	What ASP are you looking at? What revenues and margin you forecast? Imo, glove companies are oversold to way below its value which historicallytraded at 15x PE.. RS has been artificially pressed down by sellers. Good time to look at value buy. Dyodd is paramount.    lukewong82      ( Date: 23-Nov-2021 04:19) Posted: Easy logic. Now share price is 70 cents. So u keep and hope that ASP will recover BUT by the time ASP recovers if any, market becomes a bear market due to a raise in interest rate next year. And with all the antiviral medication potentially coming out, covid may not be the " theme" for next year, next year all talk will be on raise in interest rate. If I am a buyer and I buy RS now hoping that ASP recovers and share price recovers I had to face a few obstacles. 1) Will covid worsen again and cause ASP to rise again with antiviral medication coming onto the scene 2) Will the market remain so bullish next year with interest rate going up? Note that when market turns bearish, almost all counters, no matter how good the counter is, share price will be depressed. 3) When will EPF stop their selling? So many uncertainties. Yes I just voicing my opinions, no problem if u think my opinions are junks :) ... U can go on and continue to load RS big time.  Yes, talk is cheap that' s why this is a free FORUM for users to talk :) Cheers   msksmsks      ( Date: 23-Nov-2021 00:21) Posted: Pls help me to understand what interest rate had any co relation with ASP. Tks ASP already flatten which most pple already known ard US30 and whether wl it decrease further is any body guess. No rocket science theory....with covid shituation still rampant, yr guess is as good as mine. .. With health awaress behind the backdrop, u think the authorities wl rest on it's laurels.... only those whom think they are immune wl not kenna...anybody wanna place a bet .... Talk is cheap but look at real facts & reality.. Cheers
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msksmsks Supreme	23-Nov-2021 08:17        msksmsks About Contact  Quote this Post!
x 0   x 0  Alert Admin	Good morning, Appreciate yr feedback / clarification during the wee hours In all fairness , in an rising interest rate environment, yes.....i agree that most industries wl be affected especially so for those with high borrowing cost and investment mood wl tilt twds bearish mode.    But we also need to demarcate which are the ones that can weather this downtrend and emerge stronger especially  As for RS, their main profit contribution comes fm their cleanroom sector particularly for semicon and healthcare which requires stringent adherence of standard  and that' s why the ASP is still on the high side and relatively stable thus their mgmt keep reiterating that they are differentiated with it' s peers in the glove industry.    RS is in a sweet spot for this when the chip shortages are over and semicon ramp up their prodn   coupled with 5G rolling out, it wl resume it' s growth trajectory. Rise in ASP wuld presumably means there is a pent up demand or there is another wave of pandemic arising....... RS had a very strong cash flow on hand and still generating positive free cash qtly & also giving out divdends.  In no time, IMHO....their cash flow wl move very close to the current mkt cap ( now ~60%) The days of exponential growth is over and this is true.....However, as long as the Co is still on it' s growth path considering the high base comparison, this is commendable. Cheers   lukewong82      ( Date: 23-Nov-2021 04:19) Posted: Easy logic. Now share price is 70 cents. So u keep and hope that ASP will recover BUT by the time ASP recovers if any, market becomes a bear market due to a raise in interest rate next year. And with all the antiviral medication potentially coming out, covid may not be the " theme" for next year, next year all talk will be on raise in interest rate. If I am a buyer and I buy RS now hoping that ASP recovers and share price recovers I had to face a few obstacles. 1) Will covid worsen again and cause ASP to rise again with antiviral medication coming onto the scene 2) Will the market remain so bullish next year with interest rate going up? Note that when market turns bearish, almost all counters, no matter how good the counter is, share price will be depressed. 3) When will EPF stop their selling? So many uncertainties. Yes I just voicing my opinions, no problem if u think my opinions are junks :) ... U can go on and continue to load RS big time.  Yes, talk is cheap that' s why this is a free FORUM for users to talk :) Cheers   msksmsks      ( Date: 23-Nov-2021 00:21) Posted: Pls help me to understand what interest rate had any co relation with ASP. Tks ASP already flatten which most pple already known ard US30 and whether wl it decrease further is any body guess. No rocket science theory....with covid shituation still rampant, yr guess is as good as mine. .. With health awaress behind the backdrop, u think the authorities wl rest on it's laurels.... only those whom think they are immune wl not kenna...anybody wanna place a bet .... Talk is cheap but look at real facts & reality.. Cheers
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lukewong82 Master	23-Nov-2021 04:21        lukewong82 About Contact  Quote this Post!
x 0   x 0  Alert Admin	hahaha... why u so scared? If u confident of RS then u should not fear opposing opinions. Only if u already in fear then u start to bother by opposing views :) Cheers msksmsks      ( Date: 22-Nov-2021 20:58) Posted: I saw pple popping fm nowhere fanning fear. I saw tow phaw 仙 talking all sorts of theory ...who care Bring it on....who cares. Numbers don lie....but human nature wl Bring out yr numbers to debate else plucking air fm that space Cheers
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lukewong82 Master	23-Nov-2021 04:19        lukewong82 About Contact  Quote this Post!
x 0   x 0  Alert Admin	Easy logic. Now share price is 70 cents. So u keep and hope that ASP will recover BUT by the time ASP recovers if any, market becomes a bear market due to a raise in interest rate next year. And with all the antiviral medication potentially coming out, covid may not be the " theme" for next year, next year all talk will be on raise in interest rate. If I am a buyer and I buy RS now hoping that ASP recovers and share price recovers I had to face a few obstacles. 1) Will covid worsen again and cause ASP to rise again with antiviral medication coming onto the scene 2) Will the market remain so bullish next year with interest rate going up? Note that when market turns bearish, almost all counters, no matter how good the counter is, share price will be depressed. 3) When will EPF stop their selling? So many uncertainties. Yes I just voicing my opinions, no problem if u think my opinions are junks :) ... U can go on and continue to load RS big time.  Yes, talk is cheap that' s why this is a free FORUM for users to talk :) Cheers   msksmsks      ( Date: 23-Nov-2021 00:21) Posted: Pls help me to understand what interest rate had any co relation with ASP. Tks ASP already flatten which most pple already known ard US30 and whether wl it decrease further is any body guess. No rocket science theory....with covid shituation still rampant, yr guess is as good as mine. .. With health awaress behind the backdrop, u think the authorities wl rest on it's laurels.... only those whom think they are immune wl not kenna...anybody wanna place a bet .... Talk is cheap but look at real facts & reality.. Cheers lukewong82      ( Date: 22-Nov-2021 17:57) Posted: Price at around 70 cents when market is bull and at recent peak.  What is market turns bearish next year due to interest rate increase which is highly expected and ASP remains deflated? 50 cents is a possibility. The problem I see is ASP not recovering and the market already turns bearish, how? So there are 2 risks now loading RS..  1) ASP not recovering and declining further 2) Market is at it' s recent peak now, high chance will turn bearish/correction mode Double whammy
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msksmsks Supreme	23-Nov-2021 00:21        msksmsks About Contact  Quote this Post!
x 0   x 1  Alert Admin	Pls help me to understand what interest rate had any co relation with ASP. Tks ASP already flatten which most pple already known ard US30 and whether wl it decrease further is any body guess. No rocket science theory....with covid shituation still rampant, yr guess is as good as mine. .. With health awaress behind the backdrop, u think the authorities wl rest on it's laurels.... only those whom think they are immune wl not kenna...anybody wanna place a bet .... Talk is cheap but look at real facts & reality.. Cheers lukewong82      ( Date: 22-Nov-2021 17:57) Posted: Price at around 70 cents when market is bull and at recent peak.  What is market turns bearish next year due to interest rate increase which is highly expected and ASP remains deflated? 50 cents is a possibility. The problem I see is ASP not recovering and the market already turns bearish, how? So there are 2 risks now loading RS..  1) ASP not recovering and declining further 2) Market is at it' s recent peak now, high chance will turn bearish/correction mode Double whammy
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Longtermer Elite	22-Nov-2021 23:08        Longtermer About Contact  Quote this Post! Style: Flexible   Yells: "A disciplined investor is a wealthy investor"
x 0   x 1  Alert Admin	Lockdowns again? Protests will make covid situation worse? Pandemic is not over.. https://www.cnbc.com/2021/11/22/photos-of-anti-covid-protests-in-europe.html
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msksmsks Supreme	22-Nov-2021 20:58        msksmsks About Contact  Quote this Post!
x 0   x 0  Alert Admin	I saw pple popping fm nowhere fanning fear. I saw tow phaw 仙 talking all sorts of theory ...who care Bring it on....who cares. Numbers don lie....but human nature wl Bring out yr numbers to debate else plucking air fm that space Cheers
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lukewong82 Master	22-Nov-2021 17:57        lukewong82 About Contact  Quote this Post!
x 0   x 0  Alert Admin	Price at around 70 cents when market is bull and at recent peak.  What is market turns bearish next year due to interest rate increase which is highly expected and ASP remains deflated? 50 cents is a possibility. The problem I see is ASP not recovering and the market already turns bearish, how? So there are 2 risks now loading RS..  1) ASP not recovering and declining further 2) Market is at it' s recent peak now, high chance will turn bearish/correction mode Double whammy
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vix787 Member	22-Nov-2021 17:16        vix787 About Contact  Quote this Post!
x 0   x 0  Alert Admin	I see the sign becos the recent result briefing it mentioned customer choose to stand aside to watch the price. I remember that's one incident it what happen, human react similarly. When asp drop, customer will take a watch n see attitude. But suddenly before they realise, supply start to suddenly drop drastically, customer will suddenly panic n grab whatever they can, thus the price shoot high, even higher. My memory don't so me well, I forget what's the product. Some season investor might remember what it is and add on. The reason which cause sudden drop in supply I anticipate is suddenly many factory stop producing becos asp too low till they alrd losing money instead. sutiono      ( Date: 22-Nov-2021 16:59) Posted: But this only benefit the buyers . Oil is quite a limited supplied commodity , glove capacity can be created more easily vix787      ( Date: 22-Nov-2021 16:36) Posted: For those who still holding including myself, kinda hurtful. The bad sentiment regarding glove industry trigger by dropping of asp. As post by fellow forumer of a article about asp, I find it make sense. As asp greatly impact by many new player trying to get a share from this pie, they never anticipate the asp drop so fast which I suspect could be manipulate by big player. Look at OPEC decisions before that control the price of oil u can relate. This kinda kill their plan of entry for many new player. End of the day, I anticipate many more small glove player will drop off and at that period, asp might shoot high due to undersupply. This kind of situation happens in history for many other industry before. The cycle of oversupply will lead to suddenly greater undersupply. While we shareholders keep blaming the management did not do anything to protect the share price. But maybe to them, the big player altogether could very well all agree to just let the asp of glove drop drastically so in longer term, all big player will benefit. Something to ponder?
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yumsang Member	22-Nov-2021 17:13        yumsang About Contact  Quote this Post!
x 0   x 0  Alert Admin	cut most holdings at ard 90c and jump ship to ocbc with whatever balance that can be salvaged. not the best ship but likely can recover the " loss" . still holding a very small amount to see if it can go back to 1.20 or more
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vix787 Member	22-Nov-2021 17:11        vix787 About Contact  Quote this Post!
x 0   x 0  Alert Admin	Yes. It is easier once the manufacturing plant online. But what if asp drop till more than their cost price? They will choose to go offline if it a sudden drop of asp. But what if the asp drop drastically? It like longist suddenly see ur share price drop u will panic n consider selling. So I guess the small player will low risk tolerance will choose to exit the market or turn to their business product. If that happen, to go back if asp rise will not be easy. They have to consider what if they convert back to produce glove asp drop again. That is from my prospective why many industry have gone thru the same cycle, oversupply become even more undersupply. If that become true which I hope😅 , BB will definitely find it a chance to let it go again. Of cos it might happen too. That's the risk we have to analyse based on ownself risk appetite. sutiono      ( Date: 22-Nov-2021 16:59) Posted: But this only benefit the buyers . Oil is quite a limited supplied commodity , glove capacity can be created more easily vix787      ( Date: 22-Nov-2021 16:36) Posted: For those who still holding including myself, kinda hurtful. The bad sentiment regarding glove industry trigger by dropping of asp. As post by fellow forumer of a article about asp, I find it make sense. As asp greatly impact by many new player trying to get a share from this pie, they never anticipate the asp drop so fast which I suspect could be manipulate by big player. Look at OPEC decisions before that control the price of oil u can relate. This kinda kill their plan of entry for many new player. End of the day, I anticipate many more small glove player will drop off and at that period, asp might shoot high due to undersupply. This kind of situation happens in history for many other industry before. The cycle of oversupply will lead to suddenly greater undersupply. While we shareholders keep blaming the management did not do anything to protect the share price. But maybe to them, the big player altogether could very well all agree to just let the asp of glove drop drastically so in longer term, all big player will benefit. Something to ponder?
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sutiono Veteran	22-Nov-2021 16:59        sutiono About Contact  Quote this Post!
x 0   x 0  Alert Admin	But this only benefit the buyers . Oil is quite a limited supplied commodity , glove capacity can be created more easily vix787      ( Date: 22-Nov-2021 16:36) Posted: For those who still holding including myself, kinda hurtful. The bad sentiment regarding glove industry trigger by dropping of asp. As post by fellow forumer of a article about asp, I find it make sense. As asp greatly impact by many new player trying to get a share from this pie, they never anticipate the asp drop so fast which I suspect could be manipulate by big player. Look at OPEC decisions before that control the price of oil u can relate. This kinda kill their plan of entry for many new player. End of the day, I anticipate many more small glove player will drop off and at that period, asp might shoot high due to undersupply. This kind of situation happens in history for many other industry before. The cycle of oversupply will lead to suddenly greater undersupply. While we shareholders keep blaming the management did not do anything to protect the share price. But maybe to them, the big player altogether could very well all agree to just let the asp of glove drop drastically so in longer term, all big player will benefit. Something to ponder?
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vix787 Member	22-Nov-2021 16:36        vix787 About Contact  Quote this Post!
x 0   x 0  Alert Admin	For those who still holding including myself, kinda hurtful. The bad sentiment regarding glove industry trigger by dropping of asp. As post by fellow forumer of a article about asp, I find it make sense. As asp greatly impact by many new player trying to get a share from this pie, they never anticipate the asp drop so fast which I suspect could be manipulate by big player. Look at OPEC decisions before that control the price of oil u can relate. This kinda kill their plan of entry for many new player. End of the day, I anticipate many more small glove player will drop off and at that period, asp might shoot high due to undersupply. This kind of situation happens in history for many other industry before. The cycle of oversupply will lead to suddenly greater undersupply. While we shareholders keep blaming the management did not do anything to protect the share price. But maybe to them, the big player altogether could very well all agree to just let the asp of glove drop drastically so in longer term, all big player will benefit. Something to ponder?
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Traveler Member	22-Nov-2021 16:28        Traveler About Contact  Quote this Post!
x 0   x 0  Alert Admin	China glove manufacturers certainly have higher cost compared to those in Malaysia. Blue Sail Medical, an established  China glove manufacturer, reported a net loss of 22.9 million rmb in Q3.  [ 26 Oct 2021, Reuters] In the same quarter, all the Malaysian glove manufacturers still made good profits. Longtermer      ( Date: 22-Nov-2021 13:56) Posted: Macquarie Equities Research (MQ Research) initiates coverage on the Malaysia gloves sector, with a view that the glove manufacturers have production cost advantages over its China peers and any newer entrants. Although average selling price uncertainty lingers, valuations have turned attractive with all three glove makers trading at EV/share below pre-pandemic levels. MQ Research names Kossan as its top pick within the sector. Read on for MQ Research&rsquo s order of preference and target prices in an excerpt of the report dated 19 November 2021. Also, check out the associated Macquarie warrants over the glove names below. Negatives are priced in Incoming China glove supply threatens Malaysian manufacturers&rsquo market share. However, MQ Research believes these negatives are priced in as share prices have now fallen 70-75% from pandemic highs. MQ Research believes large-cap Malaysia glove makers have a 25-35% production-cost advantage over China peers. MQ Research initiates on Malaysia&rsquo s glove manufacturers as valuations turn attractive despite average selling prices (ASP) in flux. All three glove makers in MQ Research&rsquo s coverage are trading at an enterprise value per share (EV/share) below pre-pandemic levels. If shares decline a further 10-15% - which MQ Research believes to be the absolute bottom &ndash MQ Research sees an attractive entry point. ASPs are quickly declining (currently US$35-40 vs. mid-21 US$85-90 per &lsquo 000 pieces), and MQ Research&rsquo s top pick Kossan&rsquo s differentiated product mix shields it from potential global oversupply. Kossan is trading at a steep discount to peers (post-pandemic PER discount to TopG/Hartalega of ~15%/ 50%) and at about half their pre-pandemic EV/share. Production cost advantage over China/new entrants China: MQ Research estimates that China glove manufacturers currently have 25-35% higher production costs vs. large-scale Malaysia manufacturers due to higher fuel and labour costs. If global oversupply occurs, and prices continue to decline, MQ Research believes Malaysian large-scale manufacturers will be the last to turn unprofitable. However, MQ Research expects China producers to continue to add capacity until costs normalise despite downward pressure on margins. New entrants: MQ Research expects newer entrants in glove manufacturing to quickly become unprofitable as ASPs dive below production cost. Newer glove producers have an estimated production cost of US$35-40 per &lsquo 000 pieces (vs. existing players of US$20-23). MQ Research believes newer players will either abandon expansion plans or exit the industry altogether. Post-pandemic supply-demand outlook Frost & Sullivan expects disposable glove demand to deliver a 15.9% volume compounded annual growth rate (CAGR) post-pandemic (2019-2025F) vs. 8.2% pre-pandemic due to increased hygiene awareness. MQ Research forecasts China producers to account for 24% of global supply post-pandemic (2023E) vs. 10% pre-pandemic (2019). MQ Research expects long-term ASPs to settle at US$24-26 per &lsquo 000 vs. street estimates of US$25-30 on increased price pressure from China manufacturers. This is structurally higher than pre-pandemic prices of US$20-22 due to higher social compliance costs. Valuations are now compelling Kossan is MQ Research&rsquo s top pick MQ Research uses a price-earnings ratio (PER) methodology to value glove manufacturers, applying MQ Research&rsquo s target multiples to post-pandemic FY23E/24E earnings per share (EPS) &ndash years when MQ Research expects ASPs to stabilise. MQ Research&rsquo s multiples of 15x-21x represent between a -1.0SD to -0.25SD discount to pre-pandemic sector/company historical averages. Post-pandemic ASP uncertainty and labour practice issues linger. MQ Research&rsquo s order of preference is Kossan (OP) > Hartalega (OP) > Top Gloves (N). 12-month target price methodology TOPG MK: RM2.60 based on a PER methodology HART MK: RM6.30 based on a PER methodology KRI MK: RM2.70 based on a PER methodology
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vix787 Member	22-Nov-2021 16:24        vix787 About Contact  Quote this Post!
x 0   x 0  Alert Admin	Been a bystander watching, I realise those active forumer who "advise" against this stock are bullshxting in my point of view. Mentioned that people pm them in gratitude but well, that itself can be bullshxt. I never once seen anyone post anything grateful towards them in public here.... Not at all. So secrecy?
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wavehunter Supreme	22-Nov-2021 15:16        wavehunter About Contact  Quote this Post!   Yells: "Trade what you see, not what you hope to see."
x 0   x 0  Alert Admin
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Longtermer Elite	22-Nov-2021 13:56        Longtermer About Contact  Quote this Post! Style: Flexible   Yells: "A disciplined investor is a wealthy investor"
x 0   x 0  Alert Admin	Macquarie Equities Research (MQ Research) initiates coverage on the Malaysia gloves sector, with a view that the glove manufacturers have production cost advantages over its China peers and any newer entrants. Although average selling price uncertainty lingers, valuations have turned attractive with all three glove makers trading at EV/share below pre-pandemic levels. MQ Research names Kossan as its top pick within the sector. Read on for MQ Research&rsquo s order of preference and target prices in an excerpt of the report dated 19 November 2021. Also, check out the associated Macquarie warrants over the glove names below. Negatives are priced in Incoming China glove supply threatens Malaysian manufacturers&rsquo market share. However, MQ Research believes these negatives are priced in as share prices have now fallen 70-75% from pandemic highs. MQ Research believes large-cap Malaysia glove makers have a 25-35% production-cost advantage over China peers. MQ Research initiates on Malaysia&rsquo s glove manufacturers as valuations turn attractive despite average selling prices (ASP) in flux. All three glove makers in MQ Research&rsquo s coverage are trading at an enterprise value per share (EV/share) below pre-pandemic levels. If shares decline a further 10-15% - which MQ Research believes to be the absolute bottom &ndash MQ Research sees an attractive entry point. ASPs are quickly declining (currently US$35-40 vs. mid-21 US$85-90 per &lsquo 000 pieces), and MQ Research&rsquo s top pick Kossan&rsquo s differentiated product mix shields it from potential global oversupply. Kossan is trading at a steep discount to peers (post-pandemic PER discount to TopG/Hartalega of ~15%/ 50%) and at about half their pre-pandemic EV/share. Production cost advantage over China/new entrants China: MQ Research estimates that China glove manufacturers currently have 25-35% higher production costs vs. large-scale Malaysia manufacturers due to higher fuel and labour costs. If global oversupply occurs, and prices continue to decline, MQ Research believes Malaysian large-scale manufacturers will be the last to turn unprofitable. However, MQ Research expects China producers to continue to add capacity until costs normalise despite downward pressure on margins. New entrants: MQ Research expects newer entrants in glove manufacturing to quickly become unprofitable as ASPs dive below production cost. Newer glove producers have an estimated production cost of US$35-40 per &lsquo 000 pieces (vs. existing players of US$20-23). MQ Research believes newer players will either abandon expansion plans or exit the industry altogether. Post-pandemic supply-demand outlook Frost & Sullivan expects disposable glove demand to deliver a 15.9% volume compounded annual growth rate (CAGR) post-pandemic (2019-2025F) vs. 8.2% pre-pandemic due to increased hygiene awareness. MQ Research forecasts China producers to account for 24% of global supply post-pandemic (2023E) vs. 10% pre-pandemic (2019). MQ Research expects long-term ASPs to settle at US$24-26 per &lsquo 000 vs. street estimates of US$25-30 on increased price pressure from China manufacturers. This is structurally higher than pre-pandemic prices of US$20-22 due to higher social compliance costs. Valuations are now compelling Kossan is MQ Research&rsquo s top pick MQ Research uses a price-earnings ratio (PER) methodology to value glove manufacturers, applying MQ Research&rsquo s target multiples to post-pandemic FY23E/24E earnings per share (EPS) &ndash years when MQ Research expects ASPs to stabilise. MQ Research&rsquo s multiples of 15x-21x represent between a -1.0SD to -0.25SD discount to pre-pandemic sector/company historical averages. Post-pandemic ASP uncertainty and labour practice issues linger. MQ Research&rsquo s order of preference is Kossan (OP) > Hartalega (OP) > Top Gloves (N). 12-month target price methodology TOPG MK: RM2.60 based on a PER methodology HART MK: RM6.30 based on a PER methodology KRI MK: RM2.70 based on a PER methodology
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