KUALA LUMPUR (Oct 6): Top Glove Corporation Bhd (KL:TOPGLOV) expects an even better FY2027 after its net profit tripled in the financial year ended Aug 31, 2026 (FY2026).
Top Glove executive chairman Tan Sri Dr Lim Wee Chai said the group’s performance in FY2027 is expected to track global market demand growth of around 10%.
"For FY2027 and ahead, we should be able to sustain and should be able to do better...the profit growth or sales growth should be about 10%, following the market growth," Lim said during the group's financial briefing following the release of its fourth-quarter results.
"If we work harder and smarter, we should grow even better than 10% of the market growth rate…very likely that we will do better than FY2026," he added.
Despite the optimistic outlook, the group faces operational headwinds from rising raw material costs, driven by persistent volatility in crude oil prices from the prolonged Iran war, and the hike in natural gas tariffs starting Oct 1.
Top Glove joint managing director Ng Yong Lin said the 30% gas tariff hike is set to increase the group's cost per 1,000 pieces by 50 to 70 US cents (about RM2 to RM2.86), or 2% or 3%.
However, the group was confident it could navigate these material cost pressures in FY2027 through disciplined cost and energy saving efforts.
Ng said the group had reduced its energy consumption per 1,000 gloves by 30% to 35% compared to 2019 levels and expects automation and AI technology to cushion margins.
To offset the rising raw material and gas expenses, the group is increasing average selling prices (ASPs) by US$2 to US$4 per 1,000 pieces for October and November.
Currently, generic nitrile glove prices hover around US$21 to US$22 per 1,000 pieces.
"So for the month of October, November, we have adjusted the glove selling price by about two to three dollars or even four dollars and that will be enough to cover other costs that increase," Lim said, adding that order books for October and November remain strong despite the price revisions.
On competition from China glove manufacturers, Lim said the cost and pricing gap between Malaysian and Chinese makers has narrowed compared to three to four years ago.
"The price difference for gloves sold from Malaysia compared to China used to have a big gap of about three to four dollars. Now, Malaysian manufacturers like us have improved our costing well. So our glove costing and selling prices are very close to theirs…there is not much difference anymore," Lim said.
He added that attempts by some Chinese manufacturers to expand production into Southeast Asian nations such as Vietnam and Indonesia face operational challenges, including higher raw material import costs and reliance on Chinese expatriate staff, resulting in production costs increases of 10%.
"Competition is there, but not as tough as two, three years ago," Lim said.
For FY2026, the group's revenue grew 21% to RM4.23 billion from FY2025, supported by a 28% increase in sales volume. Net profit for the full year stood at RM308 million.
Top Glove shares closed nine sen higher or 11.46% at 87.5 sen on Tuesday, giving the group a market capitalisation of RM7.2 billion.
It was the second most active stock on Bursa Malaysia with 165.13 million shares changing hands.