KUALA LUMPUR (June 6): PublicInvest Research upgraded the rubber glove sector to 'neutral', from 'underweight' previously, and said all three glove players under its coverage — Top Glove Corp Bhd (KL:TOPGLOV), Hartalega Holdings Bhd (KL:HARTA) and Kossan Rubber Industries Bhd (KL:KOSSAN) — had posted a stronger set of results for the latest quarter.

In a note on Thursday, the research house said the glove industry is entering a recovery phase, with an uptick in demand, as customers replenish their inventories.

Additionally, with the US imposing higher tariff rates on China’s surgical and medical gloves — from 7.5% to 25% — from 2026, PublicInvest expects diversion of orders from China to Malaysia.

It expects this development to narrow the pricing gap between Malaysian and Chinese glove players, enhancing the competitiveness of local players and enabling them to regain market share.

Thus, PublicInvest upgraded its calls on Hartalega, Top Glove and Kossan from 'underperform' to 'neutral', with higher price-to-book multiples and target prices.

“We are now 'neutral' on the glove sector, as we generally believe that the earnings growth potential has largely been captured in current valuations,” the research house said.