The biggest joke is Maybank analyst visited China production and got glittered eyes. They see touchscreen and "high tech" stuff and they lost their minds. Ridiculous ..... 😂

https://www.thestar.com.my/business/business-news/2024/07/31/glove-sector-to-see-continued-challenges-ahead

The biggest joke is Maybank analyst visited China production and got glittered eyes. They see touchscreen and "high tech" stuff and they lost their minds. Ridiculous ..... 😂

From Hartalega forum I share it here:

The only fear of China gloves is them undercutting in ASP. Lets think this logically.

TopGlove ASP is $17. Operational Loss
Hartalega ASP is $21. Operational Loss
Kossan ASP is $16. Operational Profit
China ASP is $16. Operational Profit

Logic 1:
Is China operation so cost effective and "special" that they are still in operational profit although selling at lower ASP?
Answer is NO. If that is true, then Kossan should be in operation loss like other Msian gloves company. Since Kossan is making operational profit, this can only mean LOWER ASP are STEALING ORDERS from HIGHER ASP glove makers. Demand being limited, hitting the right volume will make operational profit. China "high tech" operation is NOTHING SPECIAL. Hartalega and Kossan have automation in their production. They are also very "high tech".

Logic 2:
Can China expanded production capacity kills Msia glove makers by stealing orders with lower ASP?
Answer is NO. Four biggest Msian glove companies had already cut production capacity in 2023/24 to reduce losses. So if China expand bigger, the higher FIXED COST will bring their operation to losses. Glove is a thin profit margin product. It's balance between ASP and VOLUME to be profitable. China cannot afford to lower their ASP further (Back to Logic 1: China "high tech" is not special).

Logic 3:
Then why China expanded their production capacity?
Bcoz of covid, ALL glove makers expanded their production capacity. China had zero-covid policy which extended the life of their expanded capacity. China will make losses if TopGlove and Hartalega lower their ASP to $16. This will easily kill of China glove makers. It is all about GETTING THE VOLUME ORDER or demand increases. If China is smart, they too should reduce production capacity (But apparently, they are not).

China only has ONE tactic ... throw price. But US tariff of 25% in 2026 will kill them. If Donald Trumps win, 60% tariff will definitely kill them and we don't need to wait until 2026. Lets hope Trump wins.

US market covers 30% of global glove demand. But higher tariff will improve Msia glove ASP significantly and GETTING 30% of the GLOBAL VOLUME ORDER.
$16 x 1.25 = $20.
Msia just need to sell at $19 to kick China's order out of US.
China glove will definitely go into LOSSES with LOWER VOLUME.

As for 70% of the global market, Malaysia can just follow China's price to be competitive.

US market covers 30% of global glove demand. But higher tariff will improve Msia glove ASP significantly and GETTING 30% of the GLOBAL VOLUME ORDER.
$16 x 1.25 = $20.
Msia just need to sell at $19 to kick China's order out of US.
China glove will definitely go into LOSSES with LOWER VOLUME.

As for 70% of the global market, Malaysia can just follow China's price to be competitive.

The only fear of China gloves is them undercutting in ASP. Lets think this logically.

TopGlove ASP is $17. Operational Loss
Hartalega ASP is $21. Operational Loss
Kossan ASP is $16. Operational Profit
China ASP is $16. Operational Profit

Logic 1:
Is China operation so cost effective and "special" that they are still in operational profit although selling at lower ASP?
Answer is NO. If that is true, then Kossan should be in operation loss like other Msian gloves company. Since Kossan is making operational profit, this can only mean LOWER ASP are STEALING ORDERS from HIGHER ASP glove makers. Demand being limited, hitting the right volume will make operational profit. China "high tech" operation is NOTHING SPECIAL. Hartalega and Kossan have automation in their production. They are also very "high tech".

Logic 2:
Can China expanded production capacity kills Msia glove makers by stealing orders with lower ASP?
Answer is NO. Four biggest Msian glove companies had already cut production capacity in 2023/24 to reduce losses. So if China expand bigger, the higher FIXED COST will bring their operation to losses. Glove is a thin profit margin product. It's balance between ASP and VOLUME to be profitable. China cannot afford to lower their ASP further (Back to Logic 1: China "high tech" is not special).

Logic 3:
Then why China expanded their production capacity?
Bcoz of covid, ALL glove makers expanded their production capacity. China had zero-covid policy which extended the life of their expanded capacity. China will make losses if TopGlove and Hartalega lower their ASP to $16. This will easily kill of China glove makers. It is all about GETTING THE VOLUME ORDER or demand increases. If China is smart, they too should reduce production capacity (But apparently, they are not).

China only has ONE tactic ... throw price. But US tariff of 25% in 2026 will kill them. If Donald Trumps win, 60% tariff will definitely kill them and we don't need to wait until 2026. Lets hope Trump wins.

Yeah, This is for the long run. But I don't have Harta. I have Kossan.

YourQuirkyWays29

@Chipee I'm not overly optimistic about the Aug QR though. Better be prepared for the worst, and hodl, better things will come. US election later this year could bring in some irrational buyers.

KENANGA is your best friend I know. They always down play glove. By the way, the chart for 'DEMAND' does not account for Malaysia cut production capacity in 2023/24. Also other player like Thailand and China cutting production. Their valuation is the most ridiculous bcoz they don't take account on cash holding in Kossan and Hartalega.

NatsukoMishima

https://www.klsescreener.com/v2/news/view/1362621

Sto RSI is oversold below 20. It should bounce up this week.

Last QR out 1 month late. So I expect the same for this qr result. Hopefully I'm wrong.

I wonder if we can allow our broker to allow shorties to use our stock for shorting? Basically lending them our stocks for them to short. We make some interest in the process. Warren Buffet loves that.

Kenanga totally ignore the Rm2bill cash in Kossan in their TP calculation. This Rm2bill brings in 40million in clean interest revenue annually.

ChandranG

Kenanga still shorting glove stocks ...😑

https://theedgemalaysia.com/node/719944

Trump win has this effect
1) 10% tariff on every imports and 60% tariff on China. That 50% difference which more than 25% tariff in 2026. And we don't need to wait until 2026 for the effect.
2) Allow export of US Natural gas which will lower global price. Msia gloves use natural gas as energy.
3) Higher US import tariff => Higher US inflation => Higher Rates => Higher US dollar. Kossan and Harta export to US for USD.

Msia glove sector is the best bet for Trump win.

Trump win has this effect
1) 10% tariff on every imports and 60% tariff on China. That 50% difference which more than 25% tariff in 2026. And we don't need to wait until 2026 for the effect.
2) Allow export of US Natural gas which will lower global price. Msia gloves use natural gas as energy.
3) Higher US import tariff => Higher US inflation => Higher Rates => Higher US dollar. Kossan and Harta export to US for USD.

Msia glove sector is the best bet for Trump win.

You are quite conservative my fren... I'm looking at Rm70-80mill based on ASP of $17-18.

Albukhary

I expect coming QR Kossan can deliver PAT of RM60-70mil.

NatsukoMishima trying to get others to boost up his shares... Wat the is this? Hahahaha ....
Sell Ranhill, sell vstec if any of you own it.

Assassination on Trump fail. I consider Trump already won the election. China's going down.
Glove is going up.... Now Trump just need to stay alive to win the election.

Assassination on Trump fail. I consider Trump already won the election. China's going down.
Glove is going up.... Now Trump just need to stay alive to win the election.

If Kossan release Q1 in 21 May 2024, then the Q2 result will be out 21 August. I don't why they keep moving their release date. It's very annoying.

American Hospitals Association wrote a letter to USTR to reconsider the tariff on medical products from China. This part of the letter:
"The AHA urged the USTR to only impose tariffs if it demonstrates sufficient manufacturing capacity outside of China to make choices among manufacturers a credible option. "

Gloves are easily available outside China. .. as in Malaysia. :)
So if USTR may reduce the tariff on other medical products from China, will USTR apply 25% tariff on China's gloves as early as 2025? Knowing US need to collect tax to pay their debt and reduce their fiscal deficit.

American Hospitals Association wrote a letter to USTR to reconsider the tariff on medical products from China. This part of the letter:
"The AHA urged the USTR to only impose tariffs if it demonstrates sufficient manufacturing capacity outside of China to make choices among manufacturers a credible option. "

Gloves are easily available outside China. .. as in Malaysia. :)
So if USTR may reduce the tariff on other medical products from China, will USTR apply 25% tariff on China's gloves as early as 2025? Knowing US need to collect tax to pay their debt and reduce their fiscal deficit.

This guy hoping other traders to push his losing stocks up 😂😂😂

NatsukoMishima

Tanmeili come vstecs , ranhill better , enough cover back your losses in glove !

Anwar announce to join BRICS, KLSE just sold off. Could it be the reason?

Anwar announce to join BRICS, KLSE just sold off. Could it be the reason?

If you have not seen the news, RIGHT parties are winning in Europe. We will see the result in UK and France election results next month. If they take over the governments, rest assure more tariff on China. I doubt China can take over Europe market.

Let the data sink in for them. We will see the next week. As Kimsua highlighted, options expiring.

ChandranG

Sell on good news today?

Now I'm observing 28 June. USTR is collecting opinions from their industry players on the tariff hike. I'm hoping they want it to be earlier than 2026. Old and bigger players may want to kill their small/new players in US. These new players has been "disturbing" their profit using China's gloves. We'll see. Can only hope.

Now I'm observing 28 June. USTR is collecting opinions from their industry players on the tariff hike. I'm hoping they want it to be earlier than 2026. Old and bigger players may want to kill their small/new players in US. These new players has been "disturbing" their profit using China's gloves. We'll see. Can only hope.

Top Glove spectacular result. Finally profitable. ASP is improving.

KimSua, Welcome. Lets Huat Ah!!!!

Topglove result on 19 June.

He is Tin Kosong 😂😂🤣

@KimSua you can read Kossan automation here from The Edge:
https://kossan.com.my/media/pdf/2021/MediaCoverage-TheEdgeDigitalEdge-KossanDigitalTransformation_20210329.pdf

On a serious note, if China gloves are smart. They start reduce production now towards 2026. If not their losses will be more. Recent news show the RIGHT vote got stronger in EU. Guess 2 things the RIGHT hates ... immigration and China. They hate China bcoz RIGHT is all abt protecting their economy and job security of their people. Tariff from EU on China as well? We'll see.

Oh my Gawd! How come nobody think of that? NatsukoMishima is such a genius!!!!

Yes yes ... glove distributors in US will stock up 3-5 years worth of China gloves bcoz their cash is unlimited. No need to budget, just fill up their warehouses with China gloves. And if their cash is limited, they just postpone their staffs' salary for 3 -5 years. Yes yes.... that will definitely work.

Also, bcoz NatsukoMishima says so ... latex on the gloves will not brittle and expire in 2 years ... No No No .... the latex will remain fresh and elastic sitting in their warehouse for FIVE YEARS. FIVE YEARS PEOPLE!!! That's how afraid the latex are of NatsukoMishima ... Because NatsukoMishima SAYS SO ... AND SO IT WILL BE!

😂😂😂😂😂😂😂

I made a quick calculation on the data of Kossan selling at $16 per 1000 gloves.

Q1 2024:
Revenue = Rm 451,625,000 = $96,090,425 (at 4.7 xchange rate)
Gloves sold per 1000 unit = $96,090,425/$16 = 6,005,652

Conclusion on SPECULATION:
Kossan can sell at $17.20. China is selling at $16 too but there's a 7.5% tariff which equals to $17.20.
Meaning Kossan could had make:-
Revenue: 6,005,652 x $17.20 = $103,297,207 x 4.7 = Rm485,496,875
Extra profit at same cost: Rm485,496,875 - Rm 451,625,000 = Rm33,871,875

As ASP improve, Kossan can sell at higher price. Harta's ASP is $21. So Kossan has much room to move up.
Just by taking ASP of $18, Kossan can easily make extra Rm56.5 million.
Rm56.5 million + Rm22.2million (Q1 24 PBT) = Rm78.7million.
Which is similar to 2019 quarterly earning.

On Utilization Rate.
Also, 6,005,652,000 per quarter means 24 billion per year. Kossan annual capacity is 32 billion in 2019.
24/32 = 75% utilization rate. This number could be lower if follows 2024 annual capacity but I don't have the number.

I see improvement. I'm holding and hope to see better Q2 results as ASP is stabilizing.

I made a quick calculation on the data of Kossan selling at $16 per 1000 gloves. Info from here:
https://www.nst.com.my/business/corporate/2024/03/1031853/kossan-rubbers-sales-may-remain-stagnant-first-half-2024-says#:~:text=The%20firm%20added%20that%20Kossan,FY23%20to%20enhance%20operating%20margins.

Yeah. I was waiting for this. Foreign funds coming in would be a good opportunity to trim down.
Higher lows make it hard to swing trade on this. Unless there big news on gloves. I think next lookout is TopGlove results.

2 sore losers putting down on Harta when the price is going up. I seriously have no idea what they are doing. Shouldn't they be focus on the shares they buy? I suspect they have personal vendetta against Harta. They must had lost a lot of money here.... 😂😂😂

Counting on natural gas over coal for ESG. China is all coal. But still a long hard fight.

😂😂😂

xiaoeh

so do i....
i mean kepo...😂

No. I'm only invested in Kossan. But Harta forum is more active... so I kepoh there. 😅
To me Kossan should catch up with Harta in price.

Demand is more than Supply. Price should go up.
Best Buy 24010 / 152
Best Sell 4002 / 62

ARBDN is back :)

Observe other markets today. If it goes up, maybe KLSE will go up too.

@Sslee
So compare the above cost what Malaysia glove manufacturers have advantage over China?

Cost:
Raw material cost (SAME)
- Same cost ..but China quality lesser bcoz thinner gloves. Reject by US & Euro standard. So if they make with equal quality to Msia, their cost is the same.

Utility cost (China Advantage )
- China use coal (cheaper). Msia use Natural Gas (NG). But it's not like China burn coal right under the melting latex. It is coal burning to convert to electricity to melt the latex or nbr. So probably comes to be almost equal. Msia just burn NG under the melting latex like a stove.

Manpower cost (China Advantage )
-China manpower power advantage is reduced by automation. China is still slightly advantageous but negligible. Volume game reduce the advantage. One man press button to produce thousands of gloves.

Logistics, shipment and marketing cost (Malaysia advantage)
- Malaysia is closer to US and Europe market. Lesser travel distance. But with volume game, it is probably negligible.

Depreciation cost (SAME)
Tax/duty cost (SAME)

If we add all this up, plus and minus .. it comes out about the same. BUT .... It's big BUT(t)

Economy of scale... TopGlove is still the biggest producer in the WORLD. And TopGlove is losing money. Meaning overhead cost is killing profit. CHINA ZERO-COVID LOCKDOWN is over since end 2022. China extraordinary glove demand is dead. There may even be oversupply in China. TopGlove close their production in China. Meaning China gloves companies are starting to lose money too. If China maintain their production capacity, they get themselves wiped out. China has to reduce overhead cost (production) and ASP improve. China gloves has to go through what Msia gloves went through. This is just economic sense.

KENANGA said China will keep selling cheap and maintain production to eliminate competition. I disagree. China does not have the backing of China demand to do that. China is oversupply.

US-CHina rivalry .... Msia advantage.

INTCO Medical Q1 result ... 238,198 million profit ... wah so good right?

So here are the numbers:
Operating Profit: 176,603
Interest Expense: -58,425
Tax Expense: -51,793
Net Profit: 66,385 🤔

Wah lau ... where did the 171,813 million profit come from? Hahaha
Who did their accounting? David Copperfield ka? 😂😂😂

China protect their own market (Second largest in the world) for themselves. So they have the second largest market (guaranteed) plus the world to sell. Their economy of scale is supported by their advantage of China's own market. Only foreign goods that can sell in China are BRANDED products.

Then Xi Jinping made a crazier move ... ways and means to remove production of foreign brands from Korea and Japan in China, thinking their labour advantage is for China to enjoy only. That's why Korean and Japanese FDI move out from China. Suddenly, Emperor Xi realised, many Chinese people start losing jobs due to Korean and Japanese closing shops.

If you think US, Europe, Japan and Korea will allow this unfair trade method, then think again.
EU proposing to add tariff on China EV. US is increasing tariff on variety of China products. The narrative now is against China. Tariff on China for unfair trade. There's more tariff to come for China. President from Germany and France visited Xi Jinping hoping to resolve with diplomatic means but I think it'll never work. Xi JInPing is full of himself.

WTO now will have to change their name to WTO-ExChina ... Why do you think Japan shares shoot up like crazy? Even Warren Buffet buys into Japan market. 😁😂🤣

Aiyoh... then why you cry father, cry mother here... Go buy China shares... Correct or not?

monetary

Annjoo Masteel LionInd. Are they experienced steel players? How are well are they buffered from China steel dumping? Even the most hi tech Tesla knock out by BYD. What magic do these rubber glove makers have? Next 2 months market will be like red carpet. I don't keep rubber glove in my safety box. I keep cash. G luck!

Competent? ..So you are competent ... Hahaha ....
You are only person I know that "makes money" and get upset with other people.
I seriously doubt you're "competent".
Normally people who make money are happy and silently looking to buy at the low.

monetary

When poor ppl get your money, u are doing charity. When rich ppl get your money, u are less COMPETENT.

Trump got convicted. But he can still run for president.
Democrats just hammer in their final nail to their coffin.

https://www.politico.com/news/2024/05/30/can-trump-still-be-president-00160433