BASED on Hartalega’s guidance, long term global glove demand is expected at a modest 4% year-on-year (YoY). However, performance across glove makers under Hong Leong Investment Bank (HLIB) coverage remained uneven in 2025.
Top Glove delivered a relatively stronger +32.6% YoY during the twelve months of 2025 (12MCY25) volume growth, materially outperforming the industry, mainly underpinned by its more competitive pricing strategy coupled with some market share gains from key domestic peers.
By contrast, Hartalega’s volumes declined -1.6% YoY (9MCY25), mainly reflecting the temporary hibernation of Plants 3-4 for upgrades since May-25, as well as market share erosion.
Kossan reported a -8.9% YoY volume contraction (9MCY25), impacted by a 10-day abrupt stop in production back in Apr-25 and order deferments by customers in quarter three of calendar year 2025 (3QCY25).
“We believe Top Glove can continue to register relatively stronger growth in 2026, supported by its competitive pricing strategy,” said HLIB, reiterating its neutral stance on the sector.
Oversupply risks continue to weigh on investor’s positioning in the sector, largely driven by aggressive capacity expansion from China’s largest producer, Intco Medical (Intco).
To recap, Intco announced in Oct-19 its plan to develop a production facility with an installed capacity of 8.8 bil pcs/annum on 30 acres of land in Vietnam’s Thanh Hoa province.
“Based on our channel checks, 5-8 bil pcs per annum of this capacity came on-stream as early as Aug-25,” said HLIB.
Separately, Intco has committed to a long-term investment in the Sei Mangkei Special Economic Zone (SEZ) in North Sumatra, Indonesia, with a total investment value of IDR15 tri (or USD925 mil).
The first phase, amounting to IDR4.8 tri (or USD296 mil), will be executed in stages over five years beginning Jul-24. This implies a potential total annual installed capacity of up to 30 bil pcs during Phase 1, or 6 bil pcs/annum.
“We believe Intco’s expansions into South East Asia (SEA) are primarily intended to serve the US market, while its China-based facilities will continue to supply non-US markets, leveraging on more favourable operating environment,” said HLIB. —Jan 14, 2025
Main image: Associated Press
