Always interesting to read comments from all the punters who has posted them here. Very obviously lots have no idea as to what’s really going on in the glove industry, the impact of Covid19 and what’s going to happen ahead.
Most of you already know the Covid19 story but how has it impacted the industry.
And I will make references to Top Glove, Supermax, Kossan, Hartalega & Comfort. Each of these manufacturers has different customer portfolio and by understanding it you will understand why/how their profit performance. So let’s put it all in perspective

Top Glove : sells to one in every 4 buyers in the world and does not have any major anchor customers. They are the cheap supplier of the glove manufacturers. They just sell on volume and don’t have quality customers.
Have been running perhaps 70-80% utilization preCovid

Supermax: one of the higher OBM producers and have their own brands in US & Brazil. Another one that sells on cheap prices and capacity utilization would be at where Top Glove was

Hartalega: very specific customer base and have quality customers. >95% capacity utilization pre Covid19

Kossan : Situation similar time Hartalega and maintains quality customers with capacity utilization similar or even higher than Harta

Comfort Rubber : much smaller manufacturer compared to all the other 4 but very specific customer base and quality customers

Covid caused the demand to spike and in Feb/March is tripled and with the MCO, it caused the further tightness in supply. Until today the supply is backlogged until at keat Qtr 1, 2021.

So how will this affect the performance of each factory and why do you see the different results of each factory?
Supermax was able to pass on the increases immediately as the were OBM. The increase to the markets was done as early as December 2019/January 2020. This way why their results reflected the jump and will still see that moving ahead.

As Top Glove has no loyalty to any customers, they followed suit in February and stated forcing increases to their customers, irregardless if they have firmed up prices. Customers were forced to accept price increases if not they would not ship. And this is an ongoing thing.

The other thing that both the above is able to increase profits is they had idle capacity which allowed them to increase volumes unlike the others. This gave them the advantage then.

Kossan, Hartalega & Comfort all were running close to full and with their customer portfolio which is based on loyalty, the price increases reflected the actual market conditions, where raw materials are at its lowest and never moved up.
However with the situation with Supermax & Top Glove performing as such, the rest have followed suit and the price increases on the ASP cams later. All of them have now followed suit and in the next 2 quarters you should see fantastic results.
Also on the Comfort Rubber FDA detention, all factories have numerous 510K’s or licenses to exports to the US. Therefore if you get into detention on one, you can still ship and sell via the others.

So for the coming 2 quarters all glove manufacturers will shop handsome profits.

Risks
People like Supermax & Top Glove has claimed expansions and selling more next year.
- manpower. There is no manpower coming in at least for the next 6 months. Therefore if you build new production capacity what are you going to run it with? Supermax bought new land. That going to be available only end 2021/2022
- Raw materials: today the raw material is only sufficient and no additional capacity of raw material is available here for the next 12 month. Only new raw material will be available in China which will be for their domestic consumption
- Vaccine : once there is a vaccine you will see the demand drop.
- China : New capacity is already being built as we speak and before you know it they will be flooding the markets with their gloves. If they can build a hospital in the short span, guess how fast they can build a production line.

So, enjoy this and the next quarter at least. Downside is low, upside will be there. With Comfort at this low price, they upside/% increase is the best amongst all the others.

Happy trading.

@Abba84....scroll up to the earlier message. You will get the answer there. Gotto be very quick thou...don’t have much time for you to react

Get ready to rock & roll....news out very very soon...
Buy in again...don’t wait.

A little bird told me that a big player will be taking up a big chunk of the company’s shares. Watch out for the announcements