He writes in his July 16 report: “We understand that cost pass-through is now more challenging than during the pre-Covid-19 period, as glovemakers are only able to pass on 50% of any cost increase to customers versus a full cost pass-through previously.”
Analyst Oong Chung Sung of RHB Bank Singapore (RHB) is maintaining his “underweight” call on the rubber products sector owing to an “unfavourable operating environment” caused by a longer-than-expected period of inventory consolidation.
Alongside this, Oong notes that competition in non-US markets “remains intense” due to hostile pricing strategy of Chinese manufacturers.
