In a thematic report dated Feb 18, MIDF Research said sentiment towards the glove sector had changed as the development of Covid-19 vaccines progressed, however, it still maintained its positive stance on the sector as the research house believed the demand growth of gloves would continue after the pandemic.
MIDF also kept its "buy" recommendations on the four companies under its coverage, namely Hartalega with a target price (TP) of RM18.25, Top Glove (TP: RM8.29), Kossan Rubber Industries Bhd (TP: RM7.33) and Supermax (TP: RM13.83).
"Malaysia supplies about 65% of the world's total rubber gloves, which means collectively, Malaysian glove companies have market leader advantages," said MIDF. The research house said one notable growth driver of rubber glove demand is higher hygiene awareness in the developing nations, while in the developed countries, demand is driven by more stringent medical processes, an ageing population which leads to higher medical needs, as well as consumption in other services sectors.
"The glove consumption is expected to remain high in 2021. We believe that mass testing and random testing will continue until a wide population is vaccinated. "This is especially so if economies, social activities, and schools are to reopen while remaining safe. For example, in the US, US$50 billion has been allocated to expand testing to buy rapid tests and increase laboratory capacity to support regular testing in schools so that they can safely reopen," it said.
That said, MIDF added that industry players also expect high demand for rubber gloves from the massive roll-out of vaccination programmes.
"On top of that, buyers may need another few months to rebuild their inventory level. According to MARGMA (Malaysian Rubber Glove Manufacturers Association), glove demand is expected to grow by 15% to 20% per annum going forward. Prior to the pandemic, demand for gloves was growing by 8% to 12% per annum," it noted.
Vaccination and testing to drive glove demand, price
Wednesday, 17 Feb 2021
HLIB said that while many countries are ramping up their vaccination programmes, current estimates indicate that global herd immunity could take as long as five years and this would provide support for glove demand in the medium term.
“Despite Centers for Disease Control and Prevention’s (CDC) guidelines stating that gloves are not required to be worn for vaccinations, our channel checks suggest that in most cases, gloves are in fact being used.
“For example, in the case of the United States, which is estimated to account for 35% of the world’s glove demand, the ‘National Strategy for the Covid-19 response and pandemic preparedness’ document published by the White House on January 2021 mentioned that the US is taking immediate action to fill supply shortfalls for vaccination supplies, which include nitrile gloves, ” HLIB said.
It said based on its observation from pictures and videos of US citizens receiving the vaccine, gloves were worn by nurses and doctors administering the vaccine.
“As such, while vaccinations are expected to eventually prevent the spread of Covid-19 (and hence lower the usage of gloves for testing), in the medium term, it would in fact increase demand for gloves, ” it added.
Dublin, Jan. 28, 2021 (GLOBE NEWSWIRE) -- The "Examination Glove Market - Forecasts from 2021 to 2026" report has been added to ResearchAndMarkets.com's offering.
The global examination glove market is expected to grow at a compound annual growth rate of 10.51% over the forecast period to reach a market size of US$10,887.626 million in 2026 from US$5,975.957 million in 2020. Examination gloves are disposable gloves designed to aid medical practitioners by providing them protection from cross-contamination from patients. The demand for examination gloves will increase owing to the rising demand for healthcare services worldwide.
Moreover, the demand for examination gloves will also snowball due to the growing adoption of hygienic and cleaner medical practices. However, the environmental concerns caused by the use of synthetic material and health concerns by the use of powdered gloves will restrain the market growth during the forecasted period. The North American and European regions will have a significant share in the market due to high investment in the medical and healthcare field. The Asia Pacific market will also see ample growth opportunities on account of rising investment in the healthcare segment and an increasing number of medical cases in the region.
Increasing Healthcare Budget To drive the Market Growth
Healthcare has become one of the imperative sectors, both in terms of employment and revenue. Healthcare comprises medical devices, medical equipment, hospitals, clinics, and others. With the increasing population, worldwide, it has become imperative to spend substantial capital on healthcare, globally. According to the United Nations, the global population is expected to surge by at least 2 billion people, in the next 30 years. The population would rose from 7.7 billion in the year 2019 to 9.7 billion, in the year 2050. These trends show the importance of healthcare spending. The United States health care spending surged by 4.6% in the year 2019, to reach approx. USD 3.8 trillion, or around USD 11,582 per person.
The overall share of GDP related to healthcare budget or spending was around 17.7% in the year 2019. According to the United States National Healthcare Expenditure, retail spending for medical products such as surgical gloves and dressings, surged by 5.6% to around USD 82.1 Billion in the year 2019, compared to an approximate rate of 3.8% in the year 2018. The growth in healthcare spending in the country continued to surge in the year 2020, because of the COVID-19 Pandemic. In India, the healthcare sector is growing due to increasing expenditure by private and public players. According to the Indian Brand Equity Foundation, a trust established by the Indian Ministry of Commerce, the Indian Healthcare Market has been growing at an 18% CAGR rate. The overall government spending on Healthcare increased from 1.3% of the GDP in the year 2016 to 1.6% in the year 2020. According to the data released by the Department for Promotion of Industry and Trade, Diagnostic Centers and Hospitals attracted Foreign Direct Investment of USD 6.72 Billion, between the year 2000 and 2020.
These developments had a positive effect on the examination gloves market, as surgical and examination gloves are an imperative part of the medical equipment market. The Government of India aims to surge healthcare spending to 3% of the GDP, by the year 2022. In Europe, healthcare spending continues to surge at an exponential rate. According to Eurostat, on average in the European Union, healthcare spending had been around 9.9% of overall GDP in the year 2018. Among the European Union Member States, the biggest healthcare spending was recorded in Germany, which spends around 11.5% of the GDP, followed by France (11.3%), and Sweden, which was at 10.9%. In comparison to the population size, healthcare expenditure was maximum among the European Union member states in Denmark, Luxembourg, and Sweden
HLT is very good IF gloves sentiment is there. But realised or not, our other second liner that not purely in gloves (venture/mask/related), one by one leaving gloves sentiment behind. Just to name it, Notion, MTAG, Tekseng, Luxchem, Prlexus. They were all rebounded without need to follow gloves sentiment. Now left one still havent moved and superoversold, Oceancash. And this ocncash is undervalued stock. I think at anytime engine will starts (not buycall, but watch tight while price at seabed)
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
kaitun78
283 posts
Posted by kaitun78 > 2021-02-22 16:30 | Report Abuse
If break Rm1. 00, this counter finish.