After continuous destocking and the elimination of excess production capacity in the past two to three years, the disposable glove industry has finally reached an inflection point.

On the evening of August 28, Yingke Medical, a leading enterprise in the global disposable glove industry, released its semi-annual report for 2024. During the reporting period, the company achieved an operating revenue of 4.512 billion yuan, a year-on-year increase of 36.94%. The net profit attributable to shareholders of the listed company was 587 million yuan, a year-on-year increase of 100.24%. The company's proposed interim dividend plan is to distribute a cash dividend of 0.5 yuan (tax included) for every 10 shares.

The relevant person in charge of Yingke Medical told the reporter from Securities Daily, "In the first half of this year, the overall capacity utilization rate of the industry has generally increased, and the supply and demand relationship has gradually returned to a balanced state."

Looking back at the changes in the industry in recent years, from 2020 to 2021, there was an extremely unbalanced supply and demand in the global disposable glove market. At that time, enterprises in the industry generally expanded their production capacity. From 2022 to 2023, the market demand gradually returned to a stable state. Downstream customers had stocked up too much inventory in the early stage and needed some time to digest it, resulting in a significant adjustment in the short-term procurement demand of the overall market, changing from a situation of short supply to oversupply.

The aforementioned person in charge of the company said that since the second half of 2023, the backlog of inventories in the downstream of the industry has entered the final stage of digestion. Meanwhile, the elimination of high-cost production capacities and outdated production capacities in the industry has shown results, and the concentration of the supply side of the industry has increased.

Since the beginning of this year, the effect of industry elimination has been obvious. With the increase in the overall capacity utilization rate of the industry, the prices of gloves have also been gradually rising. Judging from the export prices of gloves in China, according to the information disclosed by the General Administration of Customs, the average export price of nitrile gloves in June 2024 was $16.8 per thousand pairs, an increase of 8.2% compared with $15.53 per thousand pairs at the beginning of this year.

"Although the price of disposable nitrile gloves has increased in the first half of this year, the product price is still at a relatively low level. The company will adopt phased business strategies according to different market conditions to cope with market fluctuations," said the aforementioned person in charge of the company.

In the fluctuating development of the disposable glove market in recent years, the competition pattern of the industry has also been reshaped. Relying on its competitive advantages such as leading production technologies and processes, strong marketing and service capabilities, and rapid expansion of production capacity, Yingke Medical has maintained its leading position in the global industry.

The semi-annual report data shows that during the reporting period, the annualized production capacity of disposable gloves of Yingke Medical was 79 billion pairs, among which the annualized production capacity of disposable nitrile gloves was 48 billion pairs, and that of disposable PVC gloves was 31 billion pairs. According to public data, the production capacity of Yingke Medical has reached the second place in the world, second only to Topglove in Malaysia.

Zhang Yue, the chairman of Aoyou International, told the reporter from Securities Daily, "With the intensification of market competition, Chinese disposable glove manufacturers are also constantly improving their R&D capabilities and brand influence to better meet market demands. This also reflects that the competitive advantages of Chinese manufacturers in cost control, supply chain management, and technological innovation have been significantly enhanced."

In addition, the company is also accelerating the construction of overseas production capacity to cope with the possible impact of the US tariff increase policy on the company's export sales and operating performance.

Looking at the future trend of the industry, Bai Wenxi, the vice chairman of the China Enterprise Capital Alliance, said in an interview with the reporter from Securities Daily, "With the increasing global emphasis on personal protection and the efforts of Chinese manufacturers to improve product quality and reduce costs, it is expected that China's disposable glove industry will continue to maintain its growth momentum. Meanwhile, Chinese manufacturers are also constantly exploring new markets and application areas to reduce dependence on a single market and enhance their competitiveness."