For a moment, Lim Wee Chai’s ascent looked unstoppable.
His Top Glove Corp. grew bigger than Malaysia’s banks, telecommunication firms and even the state-owned electricity company during the Covid-19 pandemic. Its stock price soared 450% through the first seven months of 2020, leaving high-flyers like Moderna Inc., Zoom Video Communications Inc., Peloton Interactive Inc. and Carvana Co. in the dust and making Lim a billionaire several times over.
The maker of one out of every four gloves in the world said in September 2020 it expected “fresh highs” after profit surged 1,500%. By June 2021, as vaccines rolled out across the globe and more competitors entered the market, that guidance shifted to a gradual decline in selling prices. The company vowed six months later to press forward with an expansion, undeterred by its stock tumbling back to pre-Covid levels.
All the while, the value of Lim and his family’s stake in Top Glove slipped: From US$6 billion ($8.41 billion) at its peak in October 2020, to US$4.5 billion four months later, to US$1.6 billion in January.
Then last month came the final blow: a 99% plunge in Top Glove’s profit, enough to put those expansion plans on hold. The results are “almost close to the bottom,” Lim said. The value of the stake is down to US$1 billion now, according to the Bloomberg Billionaires Index.
Lim is hardly the only founder whose fortune skyrocketed during the pandemic and has since come back to Earth. The period minted at least five billionaires in the protective-gear sector alone, including Thai Kim Sim of Supermax Corp., which surged at an even faster pace than Top Glove, not to mention scores of newly rich tech executives and cryptocurrency holders.
But as the chairman of the biggest maker of rubber gloves, the erosion of Lim’s fortune is shaping up to be as dramatic as its rise. And unlike US or European tech founders and crypto traders, Top Glove’s rapid fall could deal a blow to Malaysia, which produces 65% of the world’s supply of gloves. While the nation’s shipments of rubber items surged 50% to almost US$14 billion last year, Chinese competitors have been ramping up production, making the reversal even more severe.
“What surprises us is the faster-than-expected decline in average selling price and the aggressiveness of Chinese glovemakers in terms of their willingness to cut the price in order to grab market share,” said Wong Wei Sum, an analyst with Maybank Investment Bank Bhd.
A Top Glove representative didn’t comment for this story.