“Following the news, there have been more enquiries from US customers reliant on Chinese glove makers,” it said in a note today.

“The United States Trade Representative (USTR) unveiled tariff increases on Chinese imports, which included a higher 50% tariff versus previously announced (in May) 25% imposition effective 2026.

“Additionally, a 100% tariff will be imposed on China’s rubber medical and surgical gloves’ exports to the US, beginning in 2025 and 2026, respectively,” it said.

Kenanga IB said indications point to a strong demand recovery moving into the financial year ending 2026 (FY2026) that appears to exceed our previous assumptions.

“We keep our FY2025 forecast earnings unchanged as we assumed a lower margin due to forex, offset by higher utilisation rate,” it said.

However, the research firm has raised Hartalega’s FY2026 forecast net profit by 12%, and target price to RM3.25 from RM3.20.

Meanwhile, Kenanga IB expects glove stock prices to be re-rated in anticipation of a near-term earnings upsurge, which is positive for the sector.

“We now expect the oversupply situation to be less acute. It will gradually improve following signs of players culling production capacity via decommissioning selective plants and the exit of new entrants,” it said.

Based on estimation, Kenanga IB said the demand-supply situation will only start to head towards equilibrium in 2026 when there is no more net new capacity coming onstream.

“Meanwhile, global demand for gloves continues to rise by 15% per annum underpinned by rising hygiene awareness,” it added.