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Income

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“We have a Sell rating on Top Glove Corp Bhd (TP: RM0.60) on near-term earnings turnaround uncertainty due to a less efficient cost base,” it said.

Phillip Capital said it sees the current sector recovery as sustainable and driven by a more favourable market dynamic.

“The decommissioning of inefficient production lines by Hartalega, Top Glove, and Kossan has helped reduce the global capacity.

“We believe the re-stocking activities will sustain over 2024/25, with global demand expected to recover to 329bn/368bn (+15%/+12% year-on-year), respectively.

“Our current projection shows Hartalega, Kossan and Top Glove utilisation rates are expected to recover to 80%/62%/36% (from 46%/50%/30%) in CY24 with Chinese glovemakers operating at near full capacity,” it said.

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