Kuala lumpur: 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.
According to BERNAMA News Agency, Kenanga Investment Bank Bhd highlighted that Top Glove Corporation Bhd's past two quarterly results showed an expansion in earnings before interest, taxes, depreciation, and amortisation (EBITDA) margins from 10 per cent in the fourth quarter of financial year 2025 (4Q FY2025) to 14 per cent in the first quarter of financial year 2026 (1Q FY2026). Kossan Rubber Industries Bhd also recorded EBITDA margins between 11 per cent and 14 per cent over the period from 4Q FY2024 to 3Q FY2025.
The investment bank noted that the gradual improvement in margins and volume sales is expected to dispel earlier concerns regarding the cost structure of Malaysian glove makers, which previously led to crimped margins and hindered overall profitability. In the short term, Malaysian glove makers could benefit from regional supply disruptions and operational challenges. Reports indicate that a Chinese manufacturer's Indonesian plant is experiencing production delays, with commercial output now expected by the end of 1Q 2026. Additionally, Sri Trang's glove facilities in Thailand's flood-affected southern hub of Hat Yai have been temporarily suspended since November 23, 2025.
Kenanga also mentioned that Malaysian glove stocks are trading at deep value levels, close to the worst of the down-cycle, while earnings show signs of recovery. The structural demand alongside supply rationalisation offers long-term upside. Kossan is expected to be the least affected due to its focus on speciality gloves, which fetch better margins, and its disciplined cost structure. The group's profitability is anticipated to be less impacted by any potential order slowdown.
At 10.02 am, Top Glove's shares on Bursa Malaysia decreased by half-a-sen to 63 sen, while Kossan dropped two sen to RM1.05. The total volume for each company stood at 2.04 million and 1.81 million, respectively.