Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/ansell-ltd" target="_blank" data-smartkarma-citation="entities:10777:1" rel="noopener">Ansell Ltd (ANN AU)</a> reported 11% YoY decline in revenue to $1,655M in FY23. Healthcare business experienced significant customer destocking through FY23, leading to 21% YoY decline in segment revenue.</li>
<li>Ansell has outlined an investment program to improve productivity and accelerate digitalization for total cost of $70–85 million. The program calls for production as well as job cut.</li>
<li>Strong headwinds in the glove sector are expected to continue as the global oversupply situation persists. Ansell expects FY24 adjusted EPS to be $0.92–1.12 (down 3–20% YoY).</li>
</ul>



Ansell Ltd (ANN AU) reported 11% YoY decline in revenue to $1,655M in FY23. Healthcare business experienced significant customer destocking through FY23, leading to 21% YoY decline in segment revenue.
Ansell has outlined an investment program to improve productivity and accelerate digitalization for total cost of $70–85 million. The program calls for production as well as job cut.
Strong headwinds in the glove sector are expected to continue as the global oversupply situation persists. Ansell expects FY24 adjusted EPS to be $0.92–1.12 (down 3–20% YoY).


Ansell Ltd (ANN AU): Worst Not Over Yet; Unfavorable Macro Backdrop Persists; Bleak FY24 Guidance

<ul>
<li>
<a href="https://www.smartkarma.com/entities/ansell-ltd" target="_blank" data-smartkarma-citation="entities:10777:1" rel="noopener">Ansell Ltd (ANN AU)</a> reported weak H1FY23 result. Strong growth in industrial more than offset by lower healthcare sales leading to 11.5% overall revenue decline on an organic constant currency-basis.</li>
<li>Healthcare business sales declined 21.9% YoY on an organic constant currency-basis, mainly dragged by a 38% YoY decline in examination/single-use glove revenue with reductions in both price and volume.</li>
<li>Ansell has revised FY23 EPS guidance downward to $1.10–1.20 (down 21% YoY at mid-point) from $1.15–1.35 earlier, reflecting market condition in healthcare GBU.</li>
</ul>



Ansell Ltd (ANN AU) reported weak H1FY23 result. Strong growth in industrial more than offset by lower healthcare sales leading to 11.5% overall revenue decline on an organic constant currency-basis.
Healthcare business sales declined 21.9% YoY on an organic constant currency-basis, mainly dragged by a 38% YoY decline in examination/single-use glove revenue with reductions in both price and volume.
Ansell has revised FY23 EPS guidance downward to $1.10–1.20 (down 21% YoY at mid-point) from $1.15–1.35 earlier, reflecting market condition in healthcare GBU.


Ansell Ltd (ANN AU): Macro Headwind to Negatively Impact Near-Term Financial Performance

<ul>
<li>
<a href="https://www.smartkarma.com/entities/supermax-corp-bhd" target="_blank" data-smartkarma-citation="entities:12883:1" rel="noopener">Supermax Corp (SUCB MK)</a> reported first-ever quarterly loss in Q2FY23 due to continued fall in rubber gloves ASP, rising input cost, and weakening of the USD against the local currency.</li>
<li>The challenging operating environment for glove will persist into 2023. Amid continued weak global demand for gloves, declining ASP, and rising input cost, Supermax will take time to regain profitability.   </li>
<li>Global demand for rubber gloves is not expected to recover soon. In the foreseeable future, the market will remain weak, competition continue to be intense, and profitability adversely impacted.</li>
</ul>



Supermax Corp (SUCB MK) reported first-ever quarterly loss in Q2FY23 due to continued fall in rubber gloves ASP, rising input cost, and weakening of the USD against the local currency.
The challenging operating environment for glove will persist into 2023. Amid continued weak global demand for gloves, declining ASP, and rising input cost, Supermax will take time to regain profitability.   
Global demand for rubber gloves is not expected to recover soon. In the foreseeable future, the market will remain weak, competition continue to be intense, and profitability adversely impacted.


Supermax Corp (SUCB MK): Gloves ASP Decline and Rising Input Costs Lead to Gloomy Business Outlook

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>
<a href="https://www.smartkarma.com/entities/ql-resources-bhd" target="_blank" data-smartkarma-citation="entities:11221:1" rel="noopener">Ql Resources (QLG MK)</a> and <a href="https://www.smartkarma.com/entities/ammb-holdings-bhd" target="_blank" data-smartkarma-citation="entities:137:1" rel="noopener">AMMB Holdings (AMM MK)</a> could replace <a href="https://www.smartkarma.com/entities/hartalega-holdings-bhd" target="_blank" data-smartkarma-citation="entities:10230:1" rel="noopener">Hartalega Holdings (HART MK)</a> and <a href="https://www.smartkarma.com/entities/top-glove-corp-bhd" target="_blank" data-smartkarma-citation="entities:20759:1" rel="noopener">Top Glove Corp (TOPG MK)</a> in the <a href="https://www.smartkarma.com/entities/kuala-lumpur-composite-index" target="_blank" data-smartkarma-citation="entities:22913:1" rel="noopener">Kuala Lumpur Composite Index (KLCI) (FBMKLCI INDEX)</a>.</li>
<li>If the changes go through, glove makers will have no representation in the index. At one point in 2020, glove makers made up nearly 20% of the <a href="https://www.smartkarma.com/entities/kuala-lumpur-composite-index" target="_blank" data-smartkarma-citation="entities:22913:1" rel="noopener">FBMKLCI INDEX</a>.</li>
<li>One-Way turnover at the rebalance will be around 3% and the impact of passive trading will be higher on the inclusions as compared to the deletions.</li>
</ul>



Ql Resources (QLG MK) and AMMB Holdings (AMM MK) could replace Hartalega Holdings (HART MK) and Top Glove Corp (TOPG MK) in the Kuala Lumpur Composite Index (KLCI) (FBMKLCI INDEX).
If the changes go through, glove makers will have no representation in the index. At one point in 2020, glove makers made up nearly 20% of the FBMKLCI INDEX.
One-Way turnover at the rebalance will be around 3% and the impact of passive trading will be higher on the inclusions as compared to the deletions.


KLCI Index Rebalance Preview: No More Glovemakers in the Index (Or How the Mighty Have Fallen)

Sri Trang Gloves (Thailand) / Equity Bottom-Up

<ul>
<li>As continued strong market competition and excess capacities from major players have capped upward trajectory for ASP, key global glove manufacturers have revised their capex plans lower.</li>
<li>To reflect the current industry climate, Sri Trang expects to reach an annual production capacity of 56.6 billion pieces in 2024 from 81.9 billion pieces earlier.</li>
<li>The company aims to launch surgical gloves, which command a high margin, in the domestic market in Q4 2022.</li>
</ul>


As continued strong market competition and excess capacities from major players have capped upward trajectory for ASP, key global glove manufacturers have revised their capex plans lower.
To reflect the current industry climate, Sri Trang expects to reach an annual production capacity of 56.6 billion pieces in 2024 from 81.9 billion pieces earlier.
The company aims to launch surgical gloves, which command a high margin, in the domestic market in Q4 2022.


Sri Trang Gloves (STGT TB): Revised Capacity Expansion Plan to Arrest Downfall in ASP

Malaysia

Top Glove Corporation Bhd manufactures a wide range of latex gloves.  The Company's products include latex examination powdered, latex examination powderfree, nitrile examination gloves,soft nitrile examination gloves, vinyl examination gloves, surgical gloves, and other related products.

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Top Glove Corp (TOPG MK)

Ansell Ltd (ANN AU): Worst Not Over Yet; Unfavorable Macro Backdrop Persists; Bleak FY24 Guidance

Ansell reported 11% decline in revenue in FY23, due to significant customer destocking in healthcare business. With continued near-term sector...

Tina Banerjee

Ansell Ltd (ANN AU): Macro Headwind to Negatively Impact Near-Term Financial Performance

Ansell reported 12% YOY revenue decline in H1FY23, dragged by 22% revenue decline in healthcare business, due to lower volume and ASP. The company...

Tina Banerjee

Supermax Corp (SUCB MK): Gloves ASP Decline and Rising Input Costs Lead to Gloomy Business Outlook

Softening glove ASP, rising input cost, and forex loss have led Supermax recording first-ever quarterly loss in Q2FY23. Amid challenging...

Tina Banerjee

KLCI Index Rebalance Preview: No More Glovemakers in the Index (Or How the Mighty Have Fallen)

QL Resources and AMMB could replace Top Glove and Hartalega in the KLCI. That would mean no glove makers in the index, down from a near 20% index...

Brian Freitas

Sri Trang Gloves (STGT TB): Revised Capacity Expansion Plan to Arrest Downfall in ASP

Sri Trang has revised annual production capacity target to 56.6B pieces in 2024 from 81.9B pieces earlier. Glove ASP seems to be bottoming out,...

Tina Banerjee

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Ansell Ltd (ANN AU): Worst Not Over Yet; Unfavorable Macro Backdrop Persists; Bleak FY24 Guidance

​Ansell reported 11% decline in revenue in FY23, due to significant customer destocking in healthcare business. With continued near-term sector...

Tina Banerjee

Ansell Ltd (ANN AU): Macro Headwind to Negatively Impact Near-Term Financial Performance

Ansell reported 12% YOY revenue decline in H1FY23, dragged by 22% revenue decline in healthcare business, due to lower volume and ASP. The company...

Tina Banerjee

Supermax Corp (SUCB MK): Gloves ASP Decline and Rising Input Costs Lead to Gloomy Business Outlook

Softening glove ASP, rising input cost, and forex loss have led Supermax recording first-ever quarterly loss in Q2FY23. Amid challenging...

Tina Banerjee

KLCI Index Rebalance Preview: No More Glovemakers in the Index (Or How the Mighty Have Fallen)

QL Resources and AMMB could replace Top Glove and Hartalega in the KLCI. That would mean no glove makers in the index, down from a near 20% index...

Brian Freitas

Sri Trang Gloves (STGT TB): Revised Capacity Expansion Plan to Arrest Downfall in ASP

Sri Trang has revised annual production capacity target to 56.6B pieces in 2024 from 81.9B pieces earlier. Glove ASP seems to be bottoming out,...

Tina Banerjee

Ansell reported 11% decline in revenue in FY23, due to significant customer destocking in healthcare business. With continued near-term sector...