Despite concerns over the Andean hantavirus outbreak, the glove industry in Malaysia could still benefit from price hikes and operational improvements, according to a research analysis.
UOBKH Research highlighted several structural challenges facing Malaysian glove makers, including continued aggressive pricing competition from Chinese players. PETALING JAYA: The glove industry is not expected to benefit meaningfully from the recent Andes hantavirus outbreak, as the risk of a large-scale global health crisis similar to the Covid-19 pandemic remains low, according to UOB Kay Hian Research.
Concerns emerged after the recent Andes hantavirus infections linked to a cruise ship resulted in three deaths and eight confirmed cases. The World Health Organization assessed the risk of a major outbreak as very low, as quarantine and containment measures have been put in place.
“As such, we do not foresee the glove industry benefiting meaningfully for now, unless the situation deteriorates,” the research house said. Still, sentiment towards Malaysian glovemakers has improved in recent months, supported by rising average selling prices , better utilisation rates and expectations of stronger earnings recovery heading into 2026 and 2027. UOBKH Research noted that glove makers have recently raised ASPs to around US$26 to US$28 per 1,000 gloves for second-quarter of financial year 2026 shipments.
This move is aimed at offsetting rising input costs, including raw material prices, which have surged by 15% to 20% on average amid ongoing Middle East tensions. Coupled with improving utilisation rates and a healthier restocking cycle from distributors and customers, UOBKH Research expects Malaysian glovemakers’ sales volumes to grow 10% to 15% year-on-year in 2026. Glovemakers also expect to benefit from operational improvements arising from automation initiatives and cost rationalisation measures implemented over the past two years.
As a result, the research house estimates they could deliver earnings growth of 12% to 15% over 2026 to 2027, with earnings likely to improve sequentially following the latest ASP hike and margin expansion cycle. Nevertheless, it cautioned that the current improvement may not be sustainable over the longer term due to persistent industry oversupply and intensifying competition from China manufacturers. UOBKH Research highlighted several structural challenges facing Malaysian glove makers, including continued aggressive pricing competition from Chinese players.
It noted that Chinese glove makers have increasingly redirected exports to Europe and Asia following higher US tariffs. Some have also been expanding production capacity into Asean countries such as Indonesia, Vietnam, and Thailand. UOBKH Research also warned that the latest ASP increases appear to be more of a cost-pass-through mechanism rather than evidence of a sustained demand-driven upcycle.
“We remain cautious that the recent rounds of ASP revisions may reverse if raw material prices or crude oil prices normalise amid de-escalation of the Middle East conflict,” it said. Following the recent rally in glove stocks, the research house believes much of the near-term upside has been priced in.
Bursa-listed glove counters have surged between 19% and 36% year-to-date, which UOBKH Research described as offering a relatively balanced risk-reward profile while also maintaining a market weight call on the stocks.
Malaysian Glove Industry Chinese Competition Andean Hantavirus Outbreak Price Hike Price Competitive Raw Material Prices Middle East Tensions Utilisation Rates Resupply Cycle Earnings Growth Automata Initiatives Operational Improvements
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