By Ying Xian Wong
Supermax Corp. shares fell after the glove maker reported its fourth consecutive quarterly loss.
Shares of the Malaysia-listed company dropped as much as 8.7% and were recently 8.3% lower at 0.95 ringgit on Thursday morning, trimming its 12-month gains to 5.6%.
The glove maker said it swung to a net loss of MYR2.05 million ($440,642) in its fiscal first quarter ended Sept. 30, compared with profit of MYR5.71 million for the same period last year, weighed by weaker demand and persistently lower selling prices, according to a filing late Wednesday.
First-quarter revenue slid 28% to MYR177.96 million.
Supermax’s operating environment may remain challenging in subsequent quarters, weighed by a massive glove oversupply, Kenanga Investment Bank analyst Raymond Choo Ping Khoon said in a note.
However, Choo said the oversupply issue may turn less severe and improve over time in response to signs that glove makers are reducing production capacity by decommissioning some plants.
Demand-supply conditions for gloves may enter an equilibrium in 2025 if there is no additional new capacity, as expected, he added.
Supermax expects smaller companies to exit the market at the end of 2024 as selling prices remain depressed amid subdued market conditions, Citi analyst Megat Fais and Chong Zhou said in a note.
Write to Ying Xian Wong at yingxian.wong@wsj.com
Read the full article here
