KUALA LUMPUR (Jan 7): Malaysian glove manufacturers will likely report weaker results for the final months of 2025, a research house said, warning that times are still tough for the industry.

Latest data showed a sharp decline in glove export volumes in November from a massive supply glut, according to CIMB Securities in a note. Depreciation of the US dollar in the fourth quarter dragged on profitability, the house said, noting that more than 90% of the industry’s sales are priced in the greenback.

“We see potential downside risk to our earnings estimates,” CIMB Securities cautioned.

Malaysian glove export volumes fell 29% month-on-month to 38,987 tonnes in November, according to the Department of Statistics Malaysia, marking the second-weakest monthly volume in 2025. Combined with October, the export volume only amounted to less than 66% of the third quarter’s volume.

The US dollar, meanwhile, depreciated by 1.7% in the fourth quarter from the third quarter. The industry is grappling with intense competition as rivals from China set up shop and ramp up their production in other Southeast Asian countries to dodge US tariffs.

A deluge of Chinese-made gloves in non-American markets have also added to the pressure faced by Malaysian manufacturers. Average selling prices will likely remain “flattish” in 2026, CIMB Securities said.

“Customers remain highly price-sensitive and thus are more likely to switch to alternative manufacturers if faced with price hikes,” the house said.

However, CIMB Securities is keeping its ‘neutral’ stance on glove stocks as “we believe that these near-term headwinds have already been accounted for” with the sector trading at just 70% of the projected book value for 2027.

Kossan Rubber Industries Bhd (KL:KOSSAN) remains the house’s preferred sector pick thanks to its relatively high exposure to non-generic products and solid net cash position, which will allow the company to weather the troubles ahead.