Sourcing analyst views

JP Morgan upgrades the Glove Sector (Topglove, Harta, Kossan)

Publish date: Wed, 27 Dec 2023, 09:25 PM
A compilation of sell-side analyst views

JP Morgan's excerpt below (27th Dec 2023)

Target Price

Hartalega (RM3.20, +20%)
Kossan (RM2.30, +26%)
Top Glove (RM0.70, -24%)

We turn bullish on the sector by going selectively (and non-consensus) OW (HART, KRI) while retaining our UW on TOPG. The industry has witnessed a pick-up in demand following 2.5 years of inventory de-stocking. ASP has stabilized on tightening S/D, and producers will benefit from improved utilization (UTR) and the resulting operating leverage, though the recovery will be uneven across producers. HART and KRI have both returned to profitability while we expect TOPG to only see profit in 3QCY24. HART and KRI’s more efficient cost structures will also see them emerge from the downturn stronger, as we expect both HART and KRI to return to pre-COVID profitability by CY2025 while TOPG’s 2025E earnings to remain 46% below 2019. We value all players on 25x 12M forward EPS (PT end date Dec-24). We are changing our valuation method to P/E as the industry finally emerges from a downturn and returns to profitability, vs. our prior methodology of asset replacement cost as industry recovery was uncertain and all glovemakers were loss-making previously.

Key catalysts include the upcoming earnings improvement across producers thus confirming the sustainability of earnings and a calculated supply addition by Chinese producers.

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1 person likes this. Showing 4 of 4 comments



2023-12-28 08:16


China is not the only story.

the other story is america gloves.

2023-12-28 23:04


JP Morgan's excerpt below (27th Dec 2023)
Target Price

Hartalega (RM3.20, +20%)
Kossan (RM2.30, +26%)
Top Glove (RM0.70, -24%)

Only TGlov are too expensive.

Why no Supermax???

2023-12-29 10:10


TGlov needs Five Levels Factory to fight Ccp Gloves???

... glove stocks were the v pride biz on our poor msia mkt.
will harta with double story factory, our best loss again in QR?
28/12/2023 10:01 PM

2023-12-29 10:13

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