KUALA LUMPUR (March 19): Top Glove Corp Bhd (KL:TOPGLOV) slipped on Thursday after a weaker than expected quarter while analysts cautioned of margin pressure ahead from rising raw material costs.
Net profit for the first half of its financial year accounted for about 45% of the consensus’ full-year estimates, prompting analysts to trim their forecasts even as they see little downside for its shares following recent decline.
The second half for the year ending Aug 31, 2026 is expected to be “softer”, weighed by moderating sales volumes and rising raw material costs, which could pressure margins going forward, said Phillip Capital.
Top Glove slipped as much as 3.5 sen or over 6% to 54 sen on Thursday. The stock was last trading at 55 sen at 11.45am, after more than 21 million shares changed hands. The company’s market capitalisation stood at RM4.5 billion based on the last price.
Shares of Top Glove have declined some 15% since 2026 began, adding to last year’s decline that wiped out more than half of its market value amid headwinds ranging from persistent industry glut to weakening US dollars that crimped its export receipts.
Nitrile rubber, the key raw material for synthetic gloves, has also turned more expensive on the back of higher crude oil prices from the geopolitical troubles in the Middle East.
While Top Glove plans to raise average selling prices, the increase “may not [be] able to fully offset” the recent appreciation of the ringgit and higher nitrile rubber costs, mainly due to rising global supply backdrop, said Hong Leong Investment Bank (HLIB).
Given potentially “flattish” volume amid rising input costs of operations and the ringgit’s strength, Top Glove could register weaker quarter-on-quarter results in the current quarter, the research house warned.
Both Phillip Capital and HLIB are on 'hold' calls, in line with the majority of analysts covering Top Glove. There are now six 'buy', 11 'hold' and three 'sell' calls on the stock, with an average target price of 65 sen, according to the 20 analysts tracked by Bloomberg.