By Yi Wei Wong
Malaysian glove maker Top Glove Corp. Bhd.'s shares slipped to a multiyear low on Thursday as analysts cast a downbeat look on the sector.
Shares of the world's largest glove maker fell as much as 8.8% to 1.25 Malaysian ringgit, their lowest intraday level in more than four years, according to FactSet. The stock is now down more than 50% this year.
Imran Yusof, head of research at MIDF Research, said the selloff could be partly due to several management changes announced by Top Glove late Wednesday, including plans to install a company veteran as managing director, but noted that other factors were likely also at play.
"The glove sector is facing a few headwinds currently such as falling [average selling prices], potentially lower demand due to the Covid-19 moving to endemic stage and intense competition especially from new entrants here and abroad," Mr. Yusof said, adding that this combination of factors could be placing pressure on Top Glove's share price.
MIDF Research analysts said separately in a research note that glove companies' performance in the current earnings season has been lackluster so far, primarily due to "coming off a period of exponential growth on the back of the Covid-19 pandemic."
Kenanga Research in a note characterized glove companies' performances as "outright disappointing" in the first quarter. It has underperform ratings on Top Glove, Supermax Corp. Bhd. and Kossan Rubber Industries Bhd.
Top Glove has yet to report earnings for its most recent quarter ended May 31. In the three months ended February, it posted a 97% decline in profit from a year earlier amid weaker prices and intensifying competition.
In recent weeks, Top Glove's stock has erased all of the gains made during the early part of the pandemic. Shares had nearly quadrupled in 2020 as the pandemic spurred global demand for protective wear.
Shares of rival glove makers Hartalega Holdings Bhd., Kossan Rubber Industries and Supermax also fell, slipping 2.0%, 1.2% and 1.0%, respectively, in Thursday afternoon trading.
Write to Yi Wei Wong at yiwei.wong@wsj.com
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