Oong believes the continued narrowing of the ASP gap would mean the prolonged price war is approaching its tail-end, which ultimately allows Malaysian manufacturers to compete via product quality rather than price.
RHB Bank Singapore is maintaining “overweight” on the rubber products sector, expecting a meaningful demand recovery trend by 2H2024 as well as a pick up in average selling prices (ASPs), which would propel glove makers' profitability in 2024.
In his June 18 report, analyst Oong Chun Sung notes that industry-blended ASPs are currently hovering at US$20-US$21 ($27.05-$28.40) per 1,000 pieces from US$20 in 1Q2024. RHB’s channel checks reveal that Chinese glove makers’ ASPs are now ranging between US$17-US$18 from US$15-US$16 in 1Q2024.
