KUALA LUMPUR (March 21): Top Glove Corporation Bhd (KL:TOPGLOV) will likely turn in smaller-than-expected profits for fiscal 2025, analysts said while flagging rising risk from Chinese rivals.

Core net profit for its six months accounted for only about 19% of consensus full-year estimates, prompting wide cuts to estimates. Investors also remained cautious, with its stock barely budging after the set of weaker-than-expected results.

“The glove industry will remain challenging for the next two quarters, as most US customers have completed their frontloading activities,” said Apex Securities, which kept the stock on ‘hold’ call. “Additionally, Chinese manufacturers have started to capture market share in the non-US market.”

Global oversupply could also worsen as China’s manufacturers circumvent US tariffs by increasing production in Southeast Asia, the research house warned.

Shares of Top Glove have fallen more than 33% since the start of 2025 even as the world’s largest natural rubber glove maker by volume remained in the black for two consecutive quarters. The company has been in the red since the financial year ended Aug 31, 2022 (FY2022).

For FY2025, the consensus now expects Top Glove to make a net income of RM119 million following latest revisions. Most research houses are cautious, with 13 ‘hold’, three ‘sell’ and only five ‘buy’ calls while the average target price has fallen to RM1.08, according to Bloomberg.  

Top Glove is facing intensifying pressure as Chinese manufacturers compete aggressively in the global market to counter the sharp decline in orders with higher US import tariffs.

Further, Chinese rivals continue to sell their products at about a 15% discount to Malaysian manufacturers which will keep average selling prices under pressure, Public Investment Bank flagged.

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