Glovemakers have set their sights on China, a market that is worth up to RM11.3bn and 139bn gloves annually. Hartalega has a head start having set up a distribution arm there in 2011. To realise this potential, the sector must first overcome higher costs and competitive pressures. We remain Neutral on the rubber glove sector. Glovemakers are a hedge against slower economic growth due to stable demand for gloves. This is balanced by the risks of higher material costs and overcapacity for gloves. Hartalega remains our top pick in the sector.

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