Top Glove 1Q Earnings Likely Weaker on Pricing, Cost Pressures

Dow Jones
Yesterday

0116 GMT - Top Glove could post sequentially weaker fiscal 1Q earnings, as pricing power fades, natural gas costs rise, and tax benefits diminish, says Hong Leong IB analyst Chee Kok Siang in a note. Average selling prices are expected to decline from 4Q FY2026 levels, which were boosted by delayed shipments carrying higher May prices. Price increases in October and November may provide some support, but are unlikely to drive margins as strongly as in recent quarters amid a more balanced supply of nitrile rubber, he reckons. Chee raises Top Glove's FY2027-FY2028 earnings estimates by 4.1%-52.8% after its FY2026 earnings beat and raises the target price to 0.73 ringgit from 0.68 ringgit. However, Chee downgrades the stock's rating to sell from hold given concerns over structural oversupply. Shares are 5.7% higher at 0.93 ringgit.

 

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