The 2025 and 2026 net profit margins of Top Glove Corporation Bhd are projected to grow at 39% and 42%, respectively, as a result of higher sales volume and factory utilisation rate, according to Kenanga Investment Bank Bhd (Kenanga Research).

Unsurprisingly, the glove manufacturer recorded a 75.5% revenue surge year-on-year (YoY) in the last quarter of financial year 2023/241 (4QFY23/24), and its revenue for the full-year grew by 11.5%, according to a press release circulated by Top Glove on Thursday.

The 4QFY23/24 revenue amounted to RM835 million, representing a 75.5% increase from the same quarter of the previous year. This is the strongest sales volume growth for Top glove since the peak of the pandemic in 2021.

Another upbeat note to the financial results is the profitability margins, before tax and after tax alike, that have shifted from the negative zone into the positive, indicating that the glovemaker is picking up from the bottom of the cycle.

Quarterly, Top Glove started to make profit from its operations in 4QFY23/24 where the profit before tax figure amounted to RM552,000, compared to the loss of RM464.4 million recorded in 4QFY22/23. After taking into consideration interest income from the same quarter, the 4QFY23/24 profit net of tax, or profit after tax came to RM7.5 million.

Despite the upbeat 4Q results, the full-year (FY2023/24) profitability was still in the red, showing a loss of RM18.1 million. Positively, this marks a stark improvement from FY2022/23's loss of RM885.5 million.

Notably, the group acknowledged that its bottom line for 4QFY23/24 was affected by the weakening of the US dollar against the ringgit, prompting an upward revision to its selling prices. However, the effect of the revision will be realised from November 2024 onwards due to the time lag.
Mr Lim Cheong Guan, Managing Director of Top Glove remarked, "We are pleased that the group's financial performance has improved significantly over the course of FY2023/24, bringing us closer to breaking even. Our full year sales volume growth continues to be healthy. These are strong indicators of market resurgence and we are well positioned to ride the recovery wave. Our consistent progress has been driven by ongoing improvement initiatives, and with the continued support of our employees, the group is confident we are well on the path to profitability and sustainable growth."

Following the announcement of the upbeat 4Q financials, Top Glove's stock price was largely unmoved, lingering around RM1.00, possibly due to the widespread knowledge of the positive revenue and profitability figures through countless positive reports on the glove manufacturing sector going into today's annoucement.