PETALING JAYA: While the worst may be over for Malaysian glove manufacturers, analysts say they are not out of the woods yet despite tentative signs of recovery.
Research houses say glove makers will likely post weaker results for the final quarter of 2025, and that times still remain tough for the industry in general.
CIMB Securities said the latest data revealed a sharp drop in glove exports in November amid a massive supply glut.
Malaysian glove export volumes fell 29% month-on-month to 38,987 tonnes in November, according to the Department of Statistics Malaysia. This was the second-weakest monthly volume in 2025.
Combined with October, the volume only amounted to less than 66% of the third quarter’s glove export volume.
The local glove industry is grappling with a massive supply glut as Chinese rivals set up shop and ramp up production in other Southeast Asian countries to circumvent US tariffs.
The flood of Chinese-made gloves into non-US markets has added to the pressure faced by Malaysian glove companies. Average selling prices (ASP) will likely remain flattish in 2026, said CIMB Securities in research note.
“Customers remain highly price-sensitive and thus are more likely to switch to alternative manufacturers if faced with price hikes,” it added.
Apart from the double whammy of supply glut and intense competition, local manufacturers have to deal with the adverse impact of a strong ringgit on their export earnings.
In the current tight margin environment, glove producers have little room to raise their ASP to offset the currency movements, BIMB Securities said in an earlier sector note.
CIMB Securities said depreciation of the US dollar in the fourth quarter dragged on profitability, noting that over 90% of the industry’s sales are priced in the greenback.
The US dollar depreciated by 1.7% against the ringgit in the fourth quarter from the third quarter. The ringgit rose nearly 10% against the US dollar by the end of 2025.
“We see potential downside risk to our earnings estimates,” cautioned the research house.
Nevertheless, CIMB Securities is maintaining its “neutral” call on glove stocks as it believes the near-term headwinds have already been accounted for.
Kossan Rubber Industries Bhd remains its preferred glove sector pick thanks to its relatively high exposure to non-generic products and solid net cash position, allowing it to weather the troubles ahead.
Kossan posted a 28.5% rise in net profit to RM37.83 million for the third quarter ended Sept 30 on higher prices despite lower sales volume.
Revenue for the quarter dropped 13.5% to RM438.98 million from RM507.39 million a year earlier.
