We won't have enough COVID-19 vaccine for everybody until 2024, warns world's largest vaccine producer

https://www.businessinsider.com/covid-vaccine-wont-reach-everyone-for-four-years-serum-institute-2020-9

We won't have enough COVID-19 vaccine for everybody until 2024, warns world's largest vaccine producer

https://www.businessinsider.com/covid-vaccine-wont-reach-everyone-for-four-years-serum-institute-2020-9

We won't have enough COVID-19 vaccine for everybody until 2024, warns world's largest vaccine producer

https://www.businessinsider.com/covid-vaccine-wont-reach-everyone-for-four-years-serum-institute-2020-9

We won't have enough COVID-19 vaccine for everybody until 2024, warns world's largest vaccine producer

https://www.businessinsider.com/covid-vaccine-wont-reach-everyone-for-four-years-serum-institute-2020-9

PETALING JAYA: The global demand for gloves is likely to continue outstripping supply for the next three to four years, even if a vaccine for the Covid-19 becomes available, according to Hartalega Holdings Bhd.

The world’s largest nitrile glove maker says the consumption of gloves worldwide will continue to increase because of changes in user behaviour.

Speaking at a press conference after the group’s AGM yesterday, Hartalega CEO Kuan Mun Leong said the Covid-19 pandemic has changed user behaviour, and that was driving up demand for gloves.

“Demand in developed countries has increased 30%, while in developing countries, demand has more than doubled, ” Mun Leong said.

Due to heightened hygiene and safety awareness, there is now a structural step-up in the use of gloves, he said, adding that this was why the medium-term outlook for glove demand would remain strong.

The industry, he said, was currently facing a huge shortage, with about 120 billion pieces of gloves as additional demand.

“This demand can only be fulfilled in three years, ” Mun Leong said, adding that the industry would not see an oversupply in the next three to four years despite players actively ramping up their production capacities.

Mun Leong pointed out that without the pandemic, global demand for gloves typically expanded at an average of 8%-10% per year.

Meanwhile, Hartalega executive chairman Kuan Kam Hon said the company was constantly expanding at an average rate of about 20% per annum, which was slightly more than the organic growth in the industry.

“For us, the situation for the next three years is that of supply not meeting demand, ” Kam Hon said.

“Even if we have extra gloves by the fourth year, it goes into inventory building. When you have a supply shortage, you are not able to build inventory, ” he added.

On capacity expansion, Mun Leong said Hartalega was currently accelerating growth through its next generation glove manufacturing complex (NGC) to to meet the demand.

“To date, we have commissioned 10 out of 12 production lines for plant six, while for plant seven, the first production line is on-track for completion by October 2020, ” Mun Leong said.

The group recently acquired a 24.23ha land in Sepang, Selangor, adjacent to its NGC plant seven, for RM158mil.

The group plans to build four new plants on that piece of land with an investment of RM1.5bil.

“The first line will start production in October 2021, ” Mun Leong said.

Upon completion, the four new plants would add 19 billion pieces per annum in installed capacity.

In addition, Hartalega is expected to invest RM3bil for its next expansion phase, code-named NGC 2.0 to build seven factories on a 38ha in Banting, Selangor. The first production line is expected to be commissioned in the first half of 2022.

Mun Leong said once fully completed by 2027, Hartalega’s expansion plans would see the group’s total annual installed capacity increase to 95 billion pieces per annum.

Hartalega’s net profit more than doubled to a record RM219.7mil for the first quarter ended June 30,2020, while revenue jumped 44% year-on-year to RM920.1mil.

Mun Leong said Hartalega is expected to continue posting better results in the quarters ahead, supported by rising average selling prices due to strong global demand for gloves.

Glove prices, he said, are now three times as high as they were in pre-Covid-19 days.

This quarter alone, spot prices for gloves jumped 30%, and he expected them to increase 40%-50% in next quarter.

PETALING JAYA: The global demand for gloves is likely to continue outstripping supply for the next three to four years, even if a vaccine for the Covid-19 becomes available, according to Hartalega Holdings Bhd.

The world’s largest nitrile glove maker says the consumption of gloves worldwide will continue to increase because of changes in user behaviour.

Speaking at a press conference after the group’s AGM yesterday, Hartalega CEO Kuan Mun Leong said the Covid-19 pandemic has changed user behaviour, and that was driving up demand for gloves.

“Demand in developed countries has increased 30%, while in developing countries, demand has more than doubled, ” Mun Leong said.

Due to heightened hygiene and safety awareness, there is now a structural step-up in the use of gloves, he said, adding that this was why the medium-term outlook for glove demand would remain strong.

The industry, he said, was currently facing a huge shortage, with about 120 billion pieces of gloves as additional demand.

“This demand can only be fulfilled in three years, ” Mun Leong said, adding that the industry would not see an oversupply in the next three to four years despite players actively ramping up their production capacities.

Mun Leong pointed out that without the pandemic, global demand for gloves typically expanded at an average of 8%-10% per year.

Meanwhile, Hartalega executive chairman Kuan Kam Hon said the company was constantly expanding at an average rate of about 20% per annum, which was slightly more than the organic growth in the industry.

“For us, the situation for the next three years is that of supply not meeting demand, ” Kam Hon said.

“Even if we have extra gloves by the fourth year, it goes into inventory building. When you have a supply shortage, you are not able to build inventory, ” he added.

On capacity expansion, Mun Leong said Hartalega was currently accelerating growth through its next generation glove manufacturing complex (NGC) to to meet the demand.

“To date, we have commissioned 10 out of 12 production lines for plant six, while for plant seven, the first production line is on-track for completion by October 2020, ” Mun Leong said.

The group recently acquired a 24.23ha land in Sepang, Selangor, adjacent to its NGC plant seven, for RM158mil.

The group plans to build four new plants on that piece of land with an investment of RM1.5bil.

“The first line will start production in October 2021, ” Mun Leong said.

Upon completion, the four new plants would add 19 billion pieces per annum in installed capacity.

In addition, Hartalega is expected to invest RM3bil for its next expansion phase, code-named NGC 2.0 to build seven factories on a 38ha in Banting, Selangor. The first production line is expected to be commissioned in the first half of 2022.

Mun Leong said once fully completed by 2027, Hartalega’s expansion plans would see the group’s total annual installed capacity increase to 95 billion pieces per annum.

Hartalega’s net profit more than doubled to a record RM219.7mil for the first quarter ended June 30,2020, while revenue jumped 44% year-on-year to RM920.1mil.

Mun Leong said Hartalega is expected to continue posting better results in the quarters ahead, supported by rising average selling prices due to strong global demand for gloves.

Glove prices, he said, are now three times as high as they were in pre-Covid-19 days.

This quarter alone, spot prices for gloves jumped 30%, and he expected them to increase 40%-50% in next quarter.

PETALING JAYA: The global demand for gloves is likely to continue outstripping supply for the next three to four years, even if a vaccine for the Covid-19 becomes available, according to Hartalega Holdings Bhd.

The world’s largest nitrile glove maker says the consumption of gloves worldwide will continue to increase because of changes in user behaviour.

Speaking at a press conference after the group’s AGM yesterday, Hartalega CEO Kuan Mun Leong said the Covid-19 pandemic has changed user behaviour, and that was driving up demand for gloves.

“Demand in developed countries has increased 30%, while in developing countries, demand has more than doubled, ” Mun Leong said.

Due to heightened hygiene and safety awareness, there is now a structural step-up in the use of gloves, he said, adding that this was why the medium-term outlook for glove demand would remain strong.

The industry, he said, was currently facing a huge shortage, with about 120 billion pieces of gloves as additional demand.

“This demand can only be fulfilled in three years, ” Mun Leong said, adding that the industry would not see an oversupply in the next three to four years despite players actively ramping up their production capacities.

Mun Leong pointed out that without the pandemic, global demand for gloves typically expanded at an average of 8%-10% per year.

Meanwhile, Hartalega executive chairman Kuan Kam Hon said the company was constantly expanding at an average rate of about 20% per annum, which was slightly more than the organic growth in the industry.

“For us, the situation for the next three years is that of supply not meeting demand, ” Kam Hon said.

“Even if we have extra gloves by the fourth year, it goes into inventory building. When you have a supply shortage, you are not able to build inventory, ” he added.

On capacity expansion, Mun Leong said Hartalega was currently accelerating growth through its next generation glove manufacturing complex (NGC) to to meet the demand.

“To date, we have commissioned 10 out of 12 production lines for plant six, while for plant seven, the first production line is on-track for completion by October 2020, ” Mun Leong said.

The group recently acquired a 24.23ha land in Sepang, Selangor, adjacent to its NGC plant seven, for RM158mil.

The group plans to build four new plants on that piece of land with an investment of RM1.5bil.

“The first line will start production in October 2021, ” Mun Leong said.

Upon completion, the four new plants would add 19 billion pieces per annum in installed capacity.

In addition, Hartalega is expected to invest RM3bil for its next expansion phase, code-named NGC 2.0 to build seven factories on a 38ha in Banting, Selangor. The first production line is expected to be commissioned in the first half of 2022.

Mun Leong said once fully completed by 2027, Hartalega’s expansion plans would see the group’s total annual installed capacity increase to 95 billion pieces per annum.

Hartalega’s net profit more than doubled to a record RM219.7mil for the first quarter ended June 30,2020, while revenue jumped 44% year-on-year to RM920.1mil.

Mun Leong said Hartalega is expected to continue posting better results in the quarters ahead, supported by rising average selling prices due to strong global demand for gloves.

Glove prices, he said, are now three times as high as they were in pre-Covid-19 days.

This quarter alone, spot prices for gloves jumped 30%, and he expected them to increase 40%-50% in next quarter.

PETALING JAYA: The global demand for gloves is likely to continue outstripping supply for the next three to four years, even if a vaccine for the Covid-19 becomes available, according to Hartalega Holdings Bhd.

The world’s largest nitrile glove maker says the consumption of gloves worldwide will continue to increase because of changes in user behaviour.

Speaking at a press conference after the group’s AGM yesterday, Hartalega CEO Kuan Mun Leong said the Covid-19 pandemic has changed user behaviour, and that was driving up demand for gloves.

“Demand in developed countries has increased 30%, while in developing countries, demand has more than doubled, ” Mun Leong said.

Due to heightened hygiene and safety awareness, there is now a structural step-up in the use of gloves, he said, adding that this was why the medium-term outlook for glove demand would remain strong.

The industry, he said, was currently facing a huge shortage, with about 120 billion pieces of gloves as additional demand.

“This demand can only be fulfilled in three years, ” Mun Leong said, adding that the industry would not see an oversupply in the next three to four years despite players actively ramping up their production capacities.

Mun Leong pointed out that without the pandemic, global demand for gloves typically expanded at an average of 8%-10% per year.

Meanwhile, Hartalega executive chairman Kuan Kam Hon said the company was constantly expanding at an average rate of about 20% per annum, which was slightly more than the organic growth in the industry.

“For us, the situation for the next three years is that of supply not meeting demand, ” Kam Hon said.

“Even if we have extra gloves by the fourth year, it goes into inventory building. When you have a supply shortage, you are not able to build inventory, ” he added.

On capacity expansion, Mun Leong said Hartalega was currently accelerating growth through its next generation glove manufacturing complex (NGC) to to meet the demand.

“To date, we have commissioned 10 out of 12 production lines for plant six, while for plant seven, the first production line is on-track for completion by October 2020, ” Mun Leong said.

The group recently acquired a 24.23ha land in Sepang, Selangor, adjacent to its NGC plant seven, for RM158mil.

The group plans to build four new plants on that piece of land with an investment of RM1.5bil.

“The first line will start production in October 2021, ” Mun Leong said.

Upon completion, the four new plants would add 19 billion pieces per annum in installed capacity.

In addition, Hartalega is expected to invest RM3bil for its next expansion phase, code-named NGC 2.0 to build seven factories on a 38ha in Banting, Selangor. The first production line is expected to be commissioned in the first half of 2022.

Mun Leong said once fully completed by 2027, Hartalega’s expansion plans would see the group’s total annual installed capacity increase to 95 billion pieces per annum.

Hartalega’s net profit more than doubled to a record RM219.7mil for the first quarter ended June 30,2020, while revenue jumped 44% year-on-year to RM920.1mil.

Mun Leong said Hartalega is expected to continue posting better results in the quarters ahead, supported by rising average selling prices due to strong global demand for gloves.

Glove prices, he said, are now three times as high as they were in pre-Covid-19 days.

This quarter alone, spot prices for gloves jumped 30%, and he expected them to increase 40%-50% in next quarter.

In term of ASPs, glove makers are expecting further hikes up to at least 1QCY21F. This is on the basis of the recent increase in raw material prices as well as the acute global shortage of gloves.

KUALA LUMPUR: CGS-CIMB Equities Research reiterates its Overweight call on the glove sector as concerns of potential declines in average selling prices (ASPs) from CY21F onwards are premature at this juncture.

The research house said signs are showing that ASPs may stay elevated for a longer period (up to end-CY21F).

“Despite its bright prospects, the Malaysian glove sector is trading attractively at 16.7 times CY21F P/E, a 24.3% discount to its five-year mean P/E of 22.1 times.

“In our view, this has largely priced in concerns of a potential windfall tax and discovery of a Covid-19 vaccine, ” it said.

Commenting on the order visibility of glove makers, the research house expected it to be robust up to at least end-1HCY21F, a testament to the current strong global glove demand.

“In our view, the acute global shortage of gloves is likely to worsen as Covid-19 cases worldwide show no signs of slowing down.

“Note that many developed markets (with high glove usage per capita), such as the US and UK, have continued to record new highs in daily Covid-19 cases, ” it said.

CGS-CIMB Research expects the situation to worsen as more western countries head towards the wintering period in 4Q20, which could lead to further spikes in Covid-19 cases.

In term of ASPs, glove makers are expecting further hikes up to at least 1QCY21F. This is on the basis of the recent increase in raw material prices as well as the acute global shortage of gloves.

“Based on our estimates, glove ASPs could rise by 10%-45% quarter-on-quarter in 4QCY20F to US$50-US$100 per 1,000 pieces, which is above our current forecasts.

“However, we gather that certain glove buyers are willing to offer fixed ASPs (at a substantial premium to current ASPs) with a minimum one-year contract tenure to secure glove supply.

“In our view, this should provide certainties of ASPs for CY21F if glove makers agree to these contracts, ” it said.

On the potential windfall tax, glove makers and Malaysia Rubber Glove Manufacturer Association (MARGMA) indicate that there has been no engagement with the government on this matter.

CGS-CIMB Research said in its view, the implementation of a windfall tax on the glove sector would have long-term negative implication as this will drive glove makers to countries with more conducive environments (e.g. labour, tax incentives, utilities, etc).

Glove stocks have been sold down with the recent newsflow on Covid-19 vaccine development.

However, it thinks the eradication of the virus may take a while longer, given that: i) no Covid-19 vaccine candidates have passed Stage 3 and 4 of clinical trials, ii) current limited production capacity may hamper mass availability, and iii) potential mutations of the virus.

Also, it believes that glove demand is unlikely to taper off even with a vaccine, as glove use will in fact increase when masses rush to be vaccinated.

In term of ASPs, glove makers are expecting further hikes up to at least 1QCY21F. This is on the basis of the recent increase in raw material prices as well as the acute global shortage of gloves.

KUALA LUMPUR: CGS-CIMB Equities Research reiterates its Overweight call on the glove sector as concerns of potential declines in average selling prices (ASPs) from CY21F onwards are premature at this juncture.

The research house said signs are showing that ASPs may stay elevated for a longer period (up to end-CY21F).

“Despite its bright prospects, the Malaysian glove sector is trading attractively at 16.7 times CY21F P/E, a 24.3% discount to its five-year mean P/E of 22.1 times.

“In our view, this has largely priced in concerns of a potential windfall tax and discovery of a Covid-19 vaccine, ” it said.

Commenting on the order visibility of glove makers, the research house expected it to be robust up to at least end-1HCY21F, a testament to the current strong global glove demand.

“In our view, the acute global shortage of gloves is likely to worsen as Covid-19 cases worldwide show no signs of slowing down.

“Note that many developed markets (with high glove usage per capita), such as the US and UK, have continued to record new highs in daily Covid-19 cases, ” it said.

CGS-CIMB Research expects the situation to worsen as more western countries head towards the wintering period in 4Q20, which could lead to further spikes in Covid-19 cases.

In term of ASPs, glove makers are expecting further hikes up to at least 1QCY21F. This is on the basis of the recent increase in raw material prices as well as the acute global shortage of gloves.

“Based on our estimates, glove ASPs could rise by 10%-45% quarter-on-quarter in 4QCY20F to US$50-US$100 per 1,000 pieces, which is above our current forecasts.

“However, we gather that certain glove buyers are willing to offer fixed ASPs (at a substantial premium to current ASPs) with a minimum one-year contract tenure to secure glove supply.

“In our view, this should provide certainties of ASPs for CY21F if glove makers agree to these contracts, ” it said.

On the potential windfall tax, glove makers and Malaysia Rubber Glove Manufacturer Association (MARGMA) indicate that there has been no engagement with the government on this matter.

CGS-CIMB Research said in its view, the implementation of a windfall tax on the glove sector would have long-term negative implication as this will drive glove makers to countries with more conducive environments (e.g. labour, tax incentives, utilities, etc).

Glove stocks have been sold down with the recent newsflow on Covid-19 vaccine development.

However, it thinks the eradication of the virus may take a while longer, given that: i) no Covid-19 vaccine candidates have passed Stage 3 and 4 of clinical trials, ii) current limited production capacity may hamper mass availability, and iii) potential mutations of the virus.

Also, it believes that glove demand is unlikely to taper off even with a vaccine, as glove use will in fact increase when masses rush to be vaccinated.

In term of ASPs, glove makers are expecting further hikes up to at least 1QCY21F. This is on the basis of the recent increase in raw material prices as well as the acute global shortage of gloves.

KUALA LUMPUR: CGS-CIMB Equities Research reiterates its Overweight call on the glove sector as concerns of potential declines in average selling prices (ASPs) from CY21F onwards are premature at this juncture.

The research house said signs are showing that ASPs may stay elevated for a longer period (up to end-CY21F).

“Despite its bright prospects, the Malaysian glove sector is trading attractively at 16.7 times CY21F P/E, a 24.3% discount to its five-year mean P/E of 22.1 times.

“In our view, this has largely priced in concerns of a potential windfall tax and discovery of a Covid-19 vaccine, ” it said.

Commenting on the order visibility of glove makers, the research house expected it to be robust up to at least end-1HCY21F, a testament to the current strong global glove demand.

“In our view, the acute global shortage of gloves is likely to worsen as Covid-19 cases worldwide show no signs of slowing down.

“Note that many developed markets (with high glove usage per capita), such as the US and UK, have continued to record new highs in daily Covid-19 cases, ” it said.

CGS-CIMB Research expects the situation to worsen as more western countries head towards the wintering period in 4Q20, which could lead to further spikes in Covid-19 cases.

In term of ASPs, glove makers are expecting further hikes up to at least 1QCY21F. This is on the basis of the recent increase in raw material prices as well as the acute global shortage of gloves.

“Based on our estimates, glove ASPs could rise by 10%-45% quarter-on-quarter in 4QCY20F to US$50-US$100 per 1,000 pieces, which is above our current forecasts.

“However, we gather that certain glove buyers are willing to offer fixed ASPs (at a substantial premium to current ASPs) with a minimum one-year contract tenure to secure glove supply.

“In our view, this should provide certainties of ASPs for CY21F if glove makers agree to these contracts, ” it said.

On the potential windfall tax, glove makers and Malaysia Rubber Glove Manufacturer Association (MARGMA) indicate that there has been no engagement with the government on this matter.

CGS-CIMB Research said in its view, the implementation of a windfall tax on the glove sector would have long-term negative implication as this will drive glove makers to countries with more conducive environments (e.g. labour, tax incentives, utilities, etc).

Glove stocks have been sold down with the recent newsflow on Covid-19 vaccine development.

However, it thinks the eradication of the virus may take a while longer, given that: i) no Covid-19 vaccine candidates have passed Stage 3 and 4 of clinical trials, ii) current limited production capacity may hamper mass availability, and iii) potential mutations of the virus.

Also, it believes that glove demand is unlikely to taper off even with a vaccine, as glove use will in fact increase when masses rush to be vaccinated.

In term of ASPs, glove makers are expecting further hikes up to at least 1QCY21F. This is on the basis of the recent increase in raw material prices as well as the acute global shortage of gloves.

KUALA LUMPUR: CGS-CIMB Equities Research reiterates its Overweight call on the glove sector as concerns of potential declines in average selling prices (ASPs) from CY21F onwards are premature at this juncture.

The research house said signs are showing that ASPs may stay elevated for a longer period (up to end-CY21F).

“Despite its bright prospects, the Malaysian glove sector is trading attractively at 16.7 times CY21F P/E, a 24.3% discount to its five-year mean P/E of 22.1 times.

“In our view, this has largely priced in concerns of a potential windfall tax and discovery of a Covid-19 vaccine, ” it said.

Commenting on the order visibility of glove makers, the research house expected it to be robust up to at least end-1HCY21F, a testament to the current strong global glove demand.

“In our view, the acute global shortage of gloves is likely to worsen as Covid-19 cases worldwide show no signs of slowing down.

“Note that many developed markets (with high glove usage per capita), such as the US and UK, have continued to record new highs in daily Covid-19 cases, ” it said.

CGS-CIMB Research expects the situation to worsen as more western countries head towards the wintering period in 4Q20, which could lead to further spikes in Covid-19 cases.

In term of ASPs, glove makers are expecting further hikes up to at least 1QCY21F. This is on the basis of the recent increase in raw material prices as well as the acute global shortage of gloves.

“Based on our estimates, glove ASPs could rise by 10%-45% quarter-on-quarter in 4QCY20F to US$50-US$100 per 1,000 pieces, which is above our current forecasts.

“However, we gather that certain glove buyers are willing to offer fixed ASPs (at a substantial premium to current ASPs) with a minimum one-year contract tenure to secure glove supply.

“In our view, this should provide certainties of ASPs for CY21F if glove makers agree to these contracts, ” it said.

On the potential windfall tax, glove makers and Malaysia Rubber Glove Manufacturer Association (MARGMA) indicate that there has been no engagement with the government on this matter.

CGS-CIMB Research said in its view, the implementation of a windfall tax on the glove sector would have long-term negative implication as this will drive glove makers to countries with more conducive environments (e.g. labour, tax incentives, utilities, etc).

Glove stocks have been sold down with the recent newsflow on Covid-19 vaccine development.

However, it thinks the eradication of the virus may take a while longer, given that: i) no Covid-19 vaccine candidates have passed Stage 3 and 4 of clinical trials, ii) current limited production capacity may hamper mass availability, and iii) potential mutations of the virus.

Also, it believes that glove demand is unlikely to taper off even with a vaccine, as glove use will in fact increase when masses rush to be vaccinated.

This is sector play all glove counters droped. Nothing to do with 7106 Fundamentals. The question is whether the QR Catalyst is strong enough to push the price at this sector condition...

Those with smart money indicators can see that Friday's sell off was from the retailers. Probably to avoid over weekend risk since 7106 is already ATH region.

Big risk big returns!