The Glove Industry: A Roller Coaster We've All Ridden

I've been watching this sector for years, and what a ride it's been.

Phase 1: The Demand Shock (2020–2021)
COVID hit. Gloves became gold. ASPs skyrocketed, plant utilisation hit 100%, and every player was printing money. Hartalega's FY21 net profit hit RM2.4b, FY22 RM2.6b. Dividends hit 50–57 sen. Everyone thought it would last forever.

Phase 2: The Supply Flood (2022–2023)
It didn't. Everyone expanded. China's Intco and Bluesail ramped up aggressively, dumping supply into the market. ASPs collapsed. Hartalega swung to a RM218m net loss in FY23. Top Glove bled for two years. The red ocean was brutal — overcapacity, price wars, and margin destruction.

Phase 3: The Slow Grind Back (2024–2026)
The survivors didn't sit still. Malaysian players — Top Glove, Hartalega, Kossan — went into overdrive on manpower, process, plant, and equipment optimisation. Automation, workforce consolidation, cost-per-unit reduction. They couldn't control ASPs, so they controlled what they could.

Then came the tailwinds:

· Raw material shortages (NBR supply tightness)
· Geopolitical instability (Middle East tensions → oil spike → cost pass-through)
· Improved pricing discipline among Chinese makers
· Gradual demand recovery

Phase 4: Where Are We Now? (2026–2027)
The industry is normalising — but not to the astronomical profits of 2021. To something more... decent. Hartalega's FY27 forecasts show ~RM70m net profit. Top Glove's FY27F ranges from RM218m to RM525m depending on who you ask (yes, the analyst spread is that wide).

This is the new reality: a fragile oligopoly, not a gold rush.

The Key Insight:

This industry will kill everyone in a pure red ocean. But if it consolidates into a rational oligopoly — where the top players compete on cost, not price — everyone survives. Not with 50% margins, but with decent, sustainable profits.

And then you wait.

Because the next huge demand surge — whether from a new health hazard, a pandemic, or a structural shift in global hygiene standards — will come. And when it does, the players who survived the downcycle, optimised their cost base, and kept their balance sheets clean will be the ones who ride it hardest.

The Lesson:

Cyclical industries are not about timing the top. They're about surviving the bottom. The companies that cut fat, invested in efficiency, and didn't blow up their balance sheets during the boom are the ones still standing.

Top Glove and Hartalega are still standing. That's not nothing.

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Not investment advice. DYODD. I'm just sharing my observations from watching this sector go through its full cycle.