@thetruthoracle. Re your point on the lead time for new capacity. If you take a look at Supermax'a latest results presentation (9th August) you would see that new capacity which started build in January will come on stream in '15-18 months' whilst new capacity announced would come on stream in '18-24 months'. So it is certainly not like a mask factory that you can setup overnight...

@SinGor. No I am not an international trader but I am an investment analyst and I can tell you that it would be pretty unwise to kneejerk sell your glove stocks at the time of the announcement of the first vaccine. Look at H1N1 (less of a pandemic than Covid?), first vaccine announced September '09 - stocks peaked March '10 (earliest). But look if you think demand will collapse then get out - better to be too early than too late....

@SinGor. Your experience at the spot end of the market doesnt have much impact on these companies. Let me explain using figures released by Sri Trang at 2Q results yesterday. Their ASP 2Q was Bt658(US$20.71) up 5% YOY and 10% QOQ. Why so low? Because they were shipping orders made at the beginning of the year. Future ASP will rise to over US$33. For how long? 'Our order backlog remains full until 4Q21 for NR gloves and until 2Q22 for NBR gloves.' (A full management discussion is available on their website.) So the reality is that we are not close to seeing peak profits from these companies and these profits will extend far beyond the end of this health crisis.

Good article. Very interesting.

Sri Trang Agro (Thai listing) probably has most potential. Only trading at 1.5x BV compared to 8x BV for Top Glove and Supermax. 10x PE based on 4x Q1 EPS but EPS should be better Q2 onwards.

These stocks look overpriced to me....