Posted by LimitUp > 2021-01-29 17:39 | Report Abuse

Demand of gloves will far outstrip supply for the next 2 years at least.

Posted by calvin69 > 2021-01-29 17:41 | Report Abuse

The pandemic is far from over - US gloves expert sees not drop in demand or even prices anytime soon. See note out from Credit Suisse Malaysia today. Glove prices to stay higher for longer! Top Glove has hugely underperformed China’s Intco (up 64% THIS YEAR)!

* Key takeaways from our call with an expert in the US healthcare supply chain: The recent supply disruption caused by Covid outbreaks at the Malaysia glove factories have seen some US buyers diversifying imports from other countries such as Turkey.

* Beyond Covid, demand growth for gloves in the US is expected to be in the 20% range, vs 6-8% in the past. The key driver of demand has been changes in user behaviour, instead of an oversimplified view of testing rates.

* Based on current data points, he believes ASP in 2021 will be at least on par, if not higher than the end-2020 levels. A correction in ASP will only take place when supply finally catches up with demand, which seems unlikely in the foreseeable future. Even so, the ASP decline is expected to be gradual, rather than a steep decline.

* Whilst sector fundamentals appear to be intact, the Malaysia and Thailand gloves' share price performance has been flattish YTD. We reiterate our Outperform on both Top Glove and Sri Trang Gloves.