Rubber Glove Industry - Snapshot of War Chest, Production Capacity, Valuations (with ex-cash) and Margin

$HARTA / 5168 (HARTALEGA HOLDINGS BERHAD) $KOSSAN / 7153 (KOSSAN RUBBER INDUSTRIES BERHAD) $TOPGLOV / 7113 (TOP GLOVE CORPORATION BHD) $SUPERMX / 7106 (SUPERMAX CORPORATION BERHAD) $SGX-AP4

Glove is again, the hot topic and I think Stockbit recently have got plenty of awesome and constructive glove discussions..

By now everyone knows that glove is in super bear downtrend, with financial performance dwindling quarter by quarter for... forseeable future? (haha jkn - the share price seems to think that way!) The industry is in downtrend, severely unfavorable demand / supply dynamics, last seen in 2007/8 according to managements of companies.

HARTA and RIVERSTONE held briefings last week and indicates price war is happening, especially Chinese glovemakers whom are selling below cost (below $20). No one knows how long the downturn is going to be, but some factors to take note in this fight would be - who have got the deep pockets to outrun the downcycle? who has the lowest burnrate? who proved to be good capital allocators during the recent upcycle? who managed relationship with all stakeholders the best? who managed / control cost the best? who has niche products? who's the most innovative?

On buying the dip, some considerations would be - are you liquid enough to withstand the downtrend? what's the normalised earnings in 2024/25 onwards? Will Malaysia retain market leadership as previously and if not, can you ascribe historical valuations to future normalised earnings? what's the margin of safety you are comfortable with? The tide and trend is obvious. Money is usually made by going against the tide but one needs to be smart about it.

Attached is a snapshot which I hope can be useful / helpful. Please read the **** as some companies, due to some variables may not be comparing apple to apple.

Regular readers in Stockbit would know that I believe only RIVERSTONE is the only "investable" company in the short term and always been my number 1 pick in the sector. However recent price movements in HARTA and KOSSAN is making them... interesting. SRITRANG also not bad. :)

Lastly, do read some other threads from @terence775 @wsk20 @hokuan, videos from @FIRLGuys abt the industry - many great discussions in this platform!

Sharing my 2cents as usual.

@hokuan @terence775 @boncos @legoen @FIRLGuys @Sweech @wsk20 @zhexiangxd @jiaming8yap @victoryong @weiboy90 @Jay888 @chukang @mahcheecherng