Hartalega Briefing: Strong Quarter Ahead, but Future Remains Uncertain

Analysts expect a strong upcoming quarter, but falling ASPs, higher gas tariffs and aggressive competition could make the next few quarters much tougher.

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Ren 🗿 & DoitDuit | Your Investing Friend
August 03, 2026

Main takeaways:

(1) Strong quarter expected but the recent surge in glove ASPs due to the closure of the Straits of Hormuz is expected to produce a very strong quarterly result. However, management cautioned that margins could come under pressure in subsequent quarters as ASPs have fallen sharply while raw material and operating costs remain elevated.

(2) Rising natural gas costs could become the industry's biggest headwind: Hartalega expects Malaysian natural gas tariffs to increase by around 40–45% in October, significantly raising manufacturing costs. This could further widen the cost advantage enjoyed by China glove manufacturers that rely predominantly on coal.

(3) Hartalega retains its strong US presence and focuses on operational improvements: Despite aggressive price competition from China glovemakers, Hartalega's US market share has remained relatively stable, supported by US tariffs on Chinese gloves. At the same time, the company continues investing in technology upgrades, automation and efficiency improvements to strengthen its long-term competitiveness.

I recently attended a briefing session by Hartalega. Below are my notes from the session, reorganized into key themes for easier reading.

We wrote about Hartalega before (https://www.doitduit.com/p/Hartalega-can-the-malaysian-glove-sector-turnaround-from-here), where I concluded that Hartalega was not cheap in spite of declining over 90% from its peak. Since then, Hartalega has continued to decline, dropping over 30% before rebounding a little bit at the onset of the closure of the Straits of Hormuz.

I believe Hartalega can report a strong quarter when they announce their upcoming results, which typically happens around early August.

I wrote a similar short note in the Paid Subscribers Telegram Group before, when Top Glove released its quarter result on June 18 which captured one month of the high ASP environment.

The same situation is happening to Hartalega, so the upcoming quarter should be considered supernormal since it captures the high cycle from April to June.

I still believe the industry is one with many headwinds, and the tight competition does not ease the oversupply situation. Nevertheless, it is good for us to keep abreast of the news in the sector, as there may come a time where value might emerge again.

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