Posted by Chipee > 1 week ago | Report Abuse

From Hartalega forum I share it here:

The only fear of China gloves is them undercutting in ASP. Lets think this logically.

TopGlove ASP is $17. Operational Loss
Hartalega ASP is $21. Operational Loss
Kossan ASP is $16. Operational Profit
China ASP is $16. Operational Profit

Logic 1:
Is China operation so cost effective and "special" that they are still in operational profit although selling at lower ASP?
Answer is NO. If that is true, then Kossan should be in operation loss like other Msian gloves company. Since Kossan is making operational profit, this can only mean LOWER ASP are STEALING ORDERS from HIGHER ASP glove makers. Demand being limited, hitting the right volume will make operational profit. China "high tech" operation is NOTHING SPECIAL. Hartalega and Kossan have automation in their production. They are also very "high tech".

Logic 2:
Can China expanded production capacity kills Msia glove makers by stealing orders with lower ASP?
Answer is NO. Four biggest Msian glove companies had already cut production capacity in 2023/24 to reduce losses. So if China expand bigger, the higher FIXED COST will bring their operation to losses. Glove is a thin profit margin product. It's balance between ASP and VOLUME to be profitable. China cannot afford to lower their ASP further (Back to Logic 1: China "high tech" is not special).

Logic 3:
Then why China expanded their production capacity?
Bcoz of covid, ALL glove makers expanded their production capacity. China had zero-covid policy which extended the life of their expanded capacity. China will make losses if TopGlove and Hartalega lower their ASP to $16. This will easily kill of China glove makers. It is all about GETTING THE VOLUME ORDER or demand increases. If China is smart, they too should reduce production capacity (But apparently, they are not).

China only has ONE tactic ... throw price. But US tariff of 25% in 2026 will kill them. If Donald Trumps win, 60% tariff will definitely kill them and we don't need to wait until 2026. Lets hope Trump wins.

US market covers 30% of global glove demand. But higher tariff will improve Msia glove ASP significantly and GETTING 30% of the GLOBAL VOLUME ORDER.
$16 x 1.25 = $20.
Msia just need to sell at $19 to kick China's order out of US.
China glove will definitely go into LOSSES with LOWER VOLUME.

As for 70% of the global market, Malaysia can just follow China's price to be competitive.

Posted by Chipee > 1 week ago | Report Abuse

The biggest joke is Maybank analyst visited China production and got glittered eyes. They see touchscreen and "high tech" stuff and they lost their minds. Ridiculous ..... 😂

https://www.thestar.com.my/business/business-news/2024/07/31/glove-sector-to-see-continued-challenges-ahead

Posted by Chipee > 1 week ago | Report Abuse

Ok ... I'm going back in for more. Finally.

Posted by SWT1988 > 6 days ago | Report Abuse

Slowly disposing after touching oversold position this morning? Weak closing will be bad

Posted by Endgame > 6 days ago | Report Abuse

Market overreaction so called the analyst plant visit. My China friend work in Intco told
me China government want them to ready enough medical glove to deal with the next pandemic, so there will be no local shortage of medical glove if that time coming. This is main purpose, they learn from experience. Analysts didn't tell you this as their purpose is to influence the price down so they can collect more Kossan. Demand of medical glove will in uptrend, will not come down.

Posted by Chipee > 6 days ago | Report Abuse

Opportunity to collect. Set a budget. Divide into 3 tranches and buy. Set lowest possible buy price.

SWT1988

Slowly disposing after touching oversold position this morning? Weak closing will be bad

Posted by Chipee > 6 days ago | Report Abuse

Overaction up = Sell. Overaction down = Buy. Sentiment play.

Endgame

Market overreaction so called the analyst plant visit. My China friend work in Intco told
me China government want them to ready enough medical glove to deal with the next pandemic, so there will be no local shortage of medical glove if that time coming. This is main purpose, they learn from experience. Analysts didn't tell you this as their purpose is to influence the price down so they can collect more Kossan. Demand of medical glove will in uptrend, will not come down.

Posted by KimSua > 6 days ago | Report Abuse

Demand is going strong. IB decided to take profit earlier than expected. Fundamentals has not changed. IB has insider advantage on what they will post and shorties will be glad to support. Have to wait another round when they need to cover their shorts. Already stable in the afternoon. Many caught off guard this time

Posted by KimSua > 6 days ago | Report Abuse

BTW the factories planner still very busy with the ramp up. And August ustr tariff will consolidate the industry feedback. If they will increase/reduce /stick to 25 percent tariff. I have read the summary medical gloves are considered no risk as alternative is easily available. So they might even increase and reduce trade items that has difficulty in their supply chain.

Posted by EatCoconutCanWin > 6 days ago | Report Abuse

Gloves impacted by new gloves from india. They switched from China to India now. Cheapest gloves compared to china n of course Malaysia.

Posted by KimSua > 6 days ago | Report Abuse

https://www.reuters.com/world/us-says-start-new-china-tariffs-will-be-delayed-by-least-two-weeks-2024-07-30/

Posted by KimSua > 6 days ago | Report Abuse

They might increase the tariff to 50 percent as medical industry provide positive comment on alternative supplier

Posted by Chipee > 6 days ago | Report Abuse

Yes. I saw USTR asking for public opinion on the tariff. They mentioned whether 25% or higher. Never mentioned lower tariff. Meaning to say 25% as the lowest tariff. They extend the review for 2 more weeks on the matter. We will know in 14 Aug.

KimSua

They might increase the tariff to 50 percent as medical industry provide positive comment on alternative supplier

Posted by Chipee > 6 days ago | Report Abuse

Anybody got in at good price? I bought some at 2.07. 2 more tranches to play with.

Chipee

Opportunity to collect. Set a budget. Divide into 3 tranches and buy. Set lowest possible buy price.

Posted by ChandranG > 6 days ago | Report Abuse

Let's join the forces of RHB 😁

https://klse.i3investor.com/web/pricetarget/research/72067

Posted by Chipee > 6 days ago | Report Abuse

From USTR's public opinion on the tariff, the hospital association said to have difficulty finding alternative to syringes suppliers outside China. I am hoping USTR will delay syringes tariffs and replace with gloves instead for this Aug. If what you said is true abt increase tariff to 50%, then it's even better.

KimSua

They might increase the tariff to 50 percent as medical industry provide positive comment on alternative supplier

Posted by Endgame > 6 days ago | Report Abuse

Investment bank analyst drama, kesian retailers...

Posted by Chipee > 6 days ago | Report Abuse

Nah where got kesian? I got top up Kossan.

Posted by Endgame > 6 days ago | Report Abuse

Why abrdn and epf keep selling, small quantities day by day? Anyone can explain their intentions?

Posted by Albukhary > 6 days ago | Report Abuse

I believe all these are robot trading.
They already preset the formula (trading strategy), and the robot system will trade on itself.
For example:- Automatic dispose XX lots to next asking price follow by 5 continuous selling transaction.

Posted by Chipee > 6 days ago | Report Abuse

It is just normal day trading activity I feel. Kossan price is attractive compare to other glove companies.

Endgame

Why abrdn and epf keep selling, small quantities day by day? Anyone can explain their intentions?

Posted by Endgame > 5 days ago | Report Abuse

Not sure in these 3 days who rushed to sell down

Posted by Chipee > 5 days ago | Report Abuse

Yeah ... Still in demand. Bid is 2.2x Ask.
We are ok guys. Relax

Best Buy 16,593
Best Sell 7493

Posted by Chipee > 5 days ago | Report Abuse

2.8x for TopGLove. Glove is still good.

Best Buy 139,332
Best Sell 48,363

Posted by Chipee > 5 days ago | Report Abuse

Like KimSua says. Fundamental and the narrative is still intact.

Posted by KimSua > 5 days ago | Report Abuse

EPF is buying again. The market markers are shaking the weak holders. I am disappointed as miss this swing. Did not expect to go so low. Expect qtrly to trigger more buy support and hopefully good news from Ustr final review by mid August. Else longer wait

Posted by ChandranG > 4 days ago | Report Abuse

EPF can get cheap price If they buy today not on 29 July 😁

Posted by mf > 4 days ago | Report Abuse

Dow futures fall 300 points as Amazon drops after earnings, jobs report ahead

Posted by Chipee > 4 days ago | Report Abuse

But Amz beat EPS by 20% wor .... Just watch the unemployment rate. Forecast is 4.1%.

Amazon.com (AMZN)
EPS 1.26 / 1.03 (Forecast)
Revenue 147.98B / 148.68B (Forecast)

Posted by Chipee > 4 days ago | Report Abuse

Me too 😅 .on Aug 1st.. Today 2nd tranche executed. Now my last tranche to execute... I'll be patient next week.

ChandranG

EPF can get cheap price If they buy today not on 29 July 😁

Posted by Chipee > 4 days ago | Report Abuse

Unemployment rate 4.3%. Forecast is 4.1%..... Going down liao la...

Posted by Chipee > 4 days ago | Report Abuse

But my bet on Glove is for coming recession. Glove is used in healthcare, food processing... which are staples industry. Meaning good or bad times ... ppl need these products and services. I'll going in next week.

Posted by Chipee > 4 days ago | Report Abuse

If you look at defensive stocks didn't go down in US stocks yesterday. These are staples like Nestle, Unilever, P&G, Campbell Soup etc .... It's a play on expectation on recession.

Posted by Chipee > 4 days ago | Report Abuse

I'm seeing defensive stocks holding well. I'm been waiting for this moment and I hope it comes true.
Investors out from IT and AI and out of US Market and start coming into emerging market like Msia for other defensive stocks like gloves. US stocks are just too high. Time for investors to come back to Msia.

Tyson Foods, Inc. 60.71 -0.08% -0.05
3M Company 125.83 -0.51% -0.64
Anheuser-Busch 63.26 +3.26% +2.00
Coca-Cola 1,281.31 +3.22% +39.93
Procter & Gamble 166.63 +0.57% +0.94
Nestlé S.A. 89.58 +0.45% +0.40
Unilever 62.28 +1.05% +0.65

Posted by Vincenzo999 > 4 days ago | Report Abuse

Chipee did you lock profit when kossan hit 2 years high?

Posted by mf > 4 days ago | Report Abuse

Europe stocks close 2.8% lower, extending losses after weaker-than-expected U.S. jobs report

Posted by Chipee > 4 days ago | Report Abuse

No. Caught me by surprise. Maybank negative report and current US correction.
My thesis is still on going. US-China rivalry and recession in US. So didn't think of taking profit. Timing the market is not my forte'... especially all TA indicators are basically lagging indicators.

Vincenzo999

Chipee did you lock profit when kossan hit 2 years high?

Posted by Chipee > 4 days ago | Report Abuse

I see US$ just drop vs RM. I hope foreign investors are coming in.

Posted by Chipee > 3 days ago | Report Abuse

Dow Jones dropped 1.8% from peak
Nasdaq dropped 8.7% from peak. I think Ai trade is over. Many unwind the carry-trade with Japan when Japan increase interest rate. Lets hope hot money is flowing into Msia gloves.

Posted by Vincenzo999 > 3 days ago | Report Abuse

Maybe the ringgit strengthening and US correction causing the recent sell down in Glove stocks.

Posted by Chipee > 3 days ago | Report Abuse

Ringgit strengthening is kinda small of a movement to worry about. Especially when US inflation is still on the high side. Promise to cut is also small. 25 basis point. If they are playing on expectation of further cuts, I feel the expectation of Trump's tariff would increase inflation in US. So that 2 narrative kinda balance it off.

Right now, increasing glove demand, increasing ASP and Trump's tariff (even recent 25% tariff) should be encouraging for Msia gloves.

Posted by Chipee > 3 days ago | Report Abuse

When I look at US inflation, I don't just evaluate on the single monthly data. I take account of previous inflation numbers that compounded to today 3%. For example, from April 2021 4.1% to Jun 2022 9.1% then down again today 3% .... each month is positive number compounding on top of each other. So the final price is still high. They really need deflation (negative percentage) to really fix the inflation problem.

That's how my recession idea for US comes from and elevated interest rate. My only concern is a crash like subprime crisis.

Posted by SWT1988 > 2 days ago | Report Abuse

will buy below 1.60

Posted by Chipee > 1 day ago | Report Abuse

I add more budget. Wait to see how low it can go. TA is useless now.

Posted by Chipee > 1 day ago | Report Abuse

This panic selling. Anything is possible.

SWT1988

will buy below 1.60

Posted by Endgame > 1 day ago | Report Abuse

Heard Tan Sri Lim start to buy already

Posted by SWT1988 > 1 day ago | Report Abuse

Potential middle east war this month. Then potential world recession. Cash is king by that time.

Posted by SWT1988 > 1 day ago | Report Abuse

Now all big bosses got excuses to dump their stocks without been questioned

Posted by Chipee > 1 day ago | Report Abuse

Hold cash first. See where this goes.

Posted by mf > 1 day ago | Report Abuse

FBM KLCI

FBM KLCI

1,540.25

-70.80