Sector Update � Rubber Products (NEUTRAL,
maintain)
- Waiting for the right grip
2Q16 was another watershed quarter for the glove
sector as earnings declined qoq largely due to ASP pressure and margin
contraction. However, sequential recovery could be nearing on ASP
adjustments, suggesting a more reasonable competitive environment. Global
glove demand trajectory remains intact on expanding glove usage and higher
consumption but a short-term supply glut will likely keep unit profitability
in check. Maintain NEUTRAL.
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