KUALA LUMPUR: The country's glove sector will see a bigger group, with three Bursa Malaysia-listed firms forming a pact to make medical gloves for exports.
The two firms confirmed in the tripartite partnership are Green Ocean Corp Bhd and AT Systematization Bhd, while the third party is believed to be Kossan Rubber Industries Bhd.
Green Ocean's recent share price surge seems to suggest something of this nature was "cooking", said an analyst who did not want to be named.
The stock has moved up almost in a 90 degree angle from 12 sen on July 22 to close at 33 sen today, with 141 million shares exchanging hands.
"This penny stock is in bull mode," said the analyst.
Relatively quiet the whole of July, a series of events has triggered investors' interest in Green Ocean.
Rumours on the possible tie-up emerged after Green Ocean announced that it had incorporated a new wholly-owned subsidiary, G Rubber Sdn Bhd on July 30 this year to produce and trade gloves.
There has also been a raft of major shareholding changes over the period, with new shareholders and board members emerging.
A new major shareholder, Mak Siew Wei, appeared in Green Ocean last week.
Mak is the chief executive officer of AT Systemisation, which a month ago announced its intention to move into the glove industry by acquiring Pearl Glove Sdn Bhd, an industrial glove maker in Sungai Petani, Kedah.
Green Ocean operates in palm oil, renewable and green products/services business segments.
Its wholly-owned subsidiary ACE Edible Oil Industries Sdn Bhd operates a 4.8-acre plot in Klang.
The land, valued at RM17 million in 2018, is the location of Green Ocean's integrated palm kernel crushing facility, fronting Jalan Kapar and it is close to Wisma Kossan on Jalan Putus.
The land is also opposite another of Kossan's subsidiary, Doshin Rubber Products Sdn Bhd.
"A combination of AT Systematization's engineering skill set, Kossan's production know-how and the ideal location controlled by Green Ocean in Klang being the triumvirate could collectively propel both AT Systematization and Green Ocean into the realms of the likes of HLT Global Bhd and Careplus Group Bhd," said the analyst.
There is a massive void currently in the glove market, with international demand far exceeding supply.
The supply void has driven prices exceedingly high.
As a result, all the glove and glove-related companies are rushing to exploit spot prices by re-negotiating existing contracts, and increasing production lines or venturing into glove manufacturing to match the demand.
Glove stocks found a second leg throughout July.
In June, there was a temporary lull, and then the top four glove stocks found a new surge of strength, as analysts upgraded the average selling prices for the four giants namely Top Glove Corp Bhd, Hartalega Holdings Bhd, Supermax Corp Bhd and Kossan, sending their share prices to dizzying heights.
The stocks of second liners like Comfort Gloves Bhd, Rubberex Corp (M) Bhd and Careplus also surged almost twofold.
Careplus was the outperformer trading from a low of 1.44 per share at the start of July to close at a record high of RM4.74 today.
Hot on the heels of the second liners are HLT Global, whose share price has surged twofold, from 70 sen in early July to a close of RM1.89 today.
There is speculation that HLT Global is also considering a venture into glove manufacturing.
HLT Global is a maker of ceramic hand moulds for glove companies and it has 55 per cent stake in HL Rubber Industries.
"It is no surprise the market is seeking for unrealised value within the glove industry, as well as focusing on new players that are bringing their manufacturing lines on stream," said a local fund manager.
https://www.nst.com.my/business/2020/08/613796/malaysias-glove-sector-gets-merrier-three-listed-firms-form-glove-making
