Hartalega wary as China glove makers expand into region
Hartalega Holdings Bhd remains cautious amid growing competition from Chinese glove makers expanding into Southeast Asia and targeting the same United States market.
KUALA LUMPUR: Hartalega Holdings Bhd remains cautious amid growing competition from Chinese glove makers expanding into Southeast Asia and targeting the same United States market.
Maybank Investment Bank Bhd (Maybank IB) said rubber glove prices are likely to stay competitive due to ongoing oversupply and additional capacity from China-based producers.
The industry currently has an active supply capacity of between 500 billion and 550 billion pieces, compared with global demand of about 370 billion pieces in 2024, keeping prices under pressure.
"In our view, the next six months will be critical, particularly for pricing strategy, as a major Chinese glove maker's Indonesia plant is set to begin commissioning.
"Initial shipments, which were targeted for October, have been delayed to between December and January next year. We believe this new capacity mainly targets the US market," Maybank IB said in a note.
To strengthen its business, Hartalega is diversifying within the healthcare sector through mergers and acquisitions and expanding its own glove brand, Gloveon, which supplies 70 per cent of Malaysia's private hospitals and leads in Australia's public healthcare segment.
Maybank IB has upgraded its call on Hartalega to "Hold" with an unchanged target price of RM1.35
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