SUPERMX: Glove Manufacturer Misses Earnings Estimates Amid Challenging Market

A leading glove manufacturer’s financial results for the full year 2025 significantly underperformed both analyst and consensus expectations. The company reported a core loss of RM121.7 million, substantially wider than the anticipated RM85.1 million. This shortfall was primarily attributed to lower-than-expected sales volumes and an increase in operating expenses.

Performance Review

In the fourth quarter of FY25, the loss before tax (LBT) widened considerably to RM101.8 million, a sharp increase from RM22.8 million recorded in the third quarter. The weaker performance stemmed from a 24.0% decline in sales to RM154.7 million, exacerbated by a two-week gas supply disruption, a weaker US Dollar, and an additional RM15 million in depreciation charges due to automation and plant upgrades. Furthermore, operating expenses climbed, partly due to the start-up costs associated with its new US manufacturing facility. On a year-on-year basis, while FY25 revenue grew by 21% driven by improvements in average selling prices (ASPs) and sales volumes, the overall LBT increased due to elevated operating expenses and intensified market competition.

Impact and Forecast Revision

Following the disappointing FY25 results, TA Securities has revised its net loss projection for FY26 upwards to RM42.4 million from a previous forecast of RM12.0 million. The profit forecast for FY27 has also been adjusted downwards to RM24.8 million from an earlier projection of RM52.9 million, reflecting the persistent cost pressures and a more conservative sales assumption.

Future Outlook and Challenges

The outlook for the company remains mixed. While sales volumes are expected to improve in FY26 as customers begin restocking, ASPs are likely to remain depressed for at least three years due to the ongoing oversupply in the global market. The expansion of Chinese glove manufacturers into Indonesia and Vietnam is also anticipated to exert further pressure on global supply. Despite commencing trial runs and securing ISO 9001 and ISO 13485 certifications, the company’s US factory is projected to remain loss-making in FY26 due to high production costs. Concurrently, efforts are underway in Malaysia to enhance operational efficiency by progressively replacing older production lines.

Valuation and Recommendation

TA Securities maintains a Hold recommendation on the stock, with a revised lower target price of RM0.53 (down from RM0.62 previously), based on 0.4x FY26 Price-to-Book ratio.