Malaysian Glove Makers Eye Margin Growth On Lower Costs In 2026 -- Kenanga

KUALA LUMPUR, Jan 15 (Bernama) -- Malaysian glove manufacturers are expected to continue showing positive signs in their cost structures, which should translate into higher margins and stronger bottom-line performance moving into 2026.

Kenanga Investment Bank Bhd said, as an indication, Top Glove Corporation Bhd’s past two quarterly results (fourth quarter of financial year 2025 -- 4Q FY2025 -- and 1Q FY2026) showed that earnings before interest, taxes, depreciation and amortisation (EBITDA) margins expanded from 10 per cent in the 4Q FY2025 to 14 per cent in the 1Q FY2026.

Meanwhile, it said Kossan Rubber Industries Bhd recorded EBITDA margins of between 11 per cent and 14 per cent over the period from 4Q FY2024 to 3Q FY2025.

“We believe the gradual margins and volume sales improvement are expected to dispel earlier concerns of Malaysian glove makers’ less-than-robust cost structure leading to margins being crimped, which stymied overall profitability,” the investment bank said in a note today.

In the meantime, it said Malaysian glove makers could benefit in the short term amid regional supply disruptions and operational challenges.

It noted that, based on channel checks, a Chinese manufacturer’s Indonesian plant is experiencing production delays, with commercial output now expected by the end of 1Q 2026, while Sri Trang’s glove facilities in Thailand’s flood-affected southern hub of Hat Yai have been temporarily suspended since Nov 23, 2025.

“Malaysian glove stocks are trading at deep value levels, close to the worst of the down-cycle, while earnings are showing nascent signs of gradual recovery and structural demand alongside supply rationalisation offer long-term upside.

“We believe Kossan would be the least affected, as it focuses on speciality gloves which fetch better margins.

“Moreover, with its disciplined cost structure and continuous efforts to streamline operations, the group’s profitability is expected to be less impacted by any potential order slowdown,” said the investment bank.

At 10.02 am, Top Glove’s shares on Bursa Malaysia inched down half-a-sen to 63 sen, while Kossan dropped two sen to RM1.05, with each company’s total volume standing at 2.04 million and 1.81 million, respectively.

-- BERNAMA