YES (in my opinion)

Despite the negative news about foreign workers issues in Malaysia.

For the past 7 days, there are many news that rubber glove companies orders are maxed out till end of this year alone such as Kossan, Topglove, Supermax and etc.

Because our rubber glove companies are maxed out, the rubber companies in thailand are ramping up in orders. According to one news...

"A lot of Thai and foreign companies are approaching us asking about Thailand's latex production capacity" according to Nikkei.
 

It is stated that Malaysia being accounted for 62% of the world glove market in year 2020. Why 62% only? Because the glove companies maxed out their production capacity till end of this year. Since we are not being able to produce anymore, we have to leave the leftover of 38% to the other foreign glove companies to eat it. 

Why are we able to command 62%? Because we are cheap, fast and efficient.


38% is still a lot. So how do we gobble up as much of these 38% in the near future?


1. Existing rubber glove companies expand more production lines

2. New rubber glove companies (new players)

In year 2018, Malaysia actually accounts for 68% of the world glove market. What does this means compared with our 62% in y2020? 

It means Malaysia does not have enough production capacity to meet that 6% buffer due to the  rapid increase of world population. It could also means that we have not been expanding our production lines as much and as fast as possible before.

World population has been increasing for the past 2 years as well from 7.5b population to 7.8b population (increase of 4%). Imagine in another 2-4 years, it could swell up to 8.1-8.4b population.

If Malaysia accounts for 68% of the world glove market again, that will be an increase of 9.6% which means the rubber glove companies will be earning much more in the future. 

With more production lines, the more "cake" glove companies can eat out of the 38%.

It would be bankers best interest to encourage their clients to prioritise to buy "healthcare fund" as opposed to buying "tech fund" eventually.

To conclude, with more production lines the higher the share price of the glove sector.

Reference:

https://asia.nikkei.com/Business/Health-Care/Thailand-ramps-up-medical-glove-production-as-it-chases-Malaysia

https://www.freemalaysiatoday.com/category/nation/2021/01/20/dont-take-off-glove-stocks-yet-says-analyst/

https://www.theedgemarkets.com/article/glove-counters-rebound-expanded-mco

https://www.nst.com.my/business/2021/01/658136/kossans-gloves-orders-fully-taken-until-end-2021

https://www.theedgemarkets.com/article/msias-rubber-glove-market-share-rise-68-%E2%80%94-margma