KUALA LUMPUR (July 13): Malaysian glove manufacturers may benefit from the US' potential move to impose a 10% tariff on China-made gloves, CIMB Research said today.  

This is because prices of Chinese glove exports to the US will increase, if the 10% tariff materialises.

In a note today, CIMB said the range of glove products include China-made vinyl and rubber-based gloves, based on its interpretation.

"Given the smaller price differential between rubber and vinyl gloves after the tariff is imposed, we believe some US customers may switch to rubber-based gloves, which should benefit Malaysian glove makers. However, the switch may not be significant, as the gloves are made from different materials and are utilised in different industries," CIMB said.

As of now, CIMB said it maintains its “Overweight” rating on the Malaysian rubber glove sector, with Supermax Corp Bhd as its preferred pick. CIMB has an "Add" call for Supermax shares, with a target price of RM4.53. At Bursa Malaysia, Supermax shares rose 12 sen to RM4.35 at 12:09pm.

CIMB said: "Supermax has expanded its production capacity to 23.4bn pieces p.a. We are turning more optimistic on its earnings growth prospects, as it has finally resolved the utilities issues faced by its long-delayed plants 10 and 11."