Top Glove outlook remains weak as industry challenges persist: analysts

KUALA LUMPUR: Top Glove Corp Bhd's earnings outlook is likely to remain under pressure, with industry challenges expected to persist into the second half of 2025 (2H25), analysts said.

RHB Research said Top Glove Corp reported third quarter (Q3) financial year 2025 (FY25) core loss of RM2.3 million, bringing 9MFY25 core loss to RM0.9 million.

The firm said that results were below its expectation due to the challenging cost pass-through despite a sequential improvement in volume sold.

"We expect industry headwinds to persist into 2H25 due to a higher operating cost environment and intensified competition," it said in a note.

On the same note, Public Investment Bank Bhd (PublicInvest) remains cautious on Top Glove's operating landscape, weighed down by persistent pricing pressure and a sluggish demand recovery.

The firm noted that the stable-to-declining trend in raw material prices is expected to further cap any upward adjustment to average selling price (ASPs).

"At this juncture, earnings visibility remains weak due to tariff uncertainty and an imbalance demand-supply dynamic," it said.

Meanwhile, Hong Leong Investment Bank Bhd (HLIB) expects Top Glove to register a flattish quarter on quarter (QoQ) results in Q4 FY25.

Looking ahead, HLIB said the sector remains clouded by heightened uncertainty around the supply- demand dynamics heading into 2026 and beyond, worsened with elevating operating costs.

"Given upbeat results, we revise our FY25 from a loss of RM1.3 million to a profit of RM21.3 million.

"However, we cut our FY26 to FY27 by 4 per cent/ 31 per cent following lower ASP assumptions to reflect the weakening outlook.

HLIB has maintained its 'Sell' recommendation and lowered its target price to 60 sen.

Read More: Here