Thursday, August 9, 2012

Kossan Rubber Industries: Maintain Buy - Major Glove Laggard

Kossan Rubber Industries: Major Glove Laggard
  • Maintain BUY. We expect 2Q12 net profit of around MYR24m (+10% QoQ, +15% YoY), inline with our expectation, lifting 1H12 net profit to MYR46m (+5% YoY).
  • Similar to its peers, Kossan is a beneficiary of latex/NBR input costs and stronger USD:MYR, but its share price has substantially underperformed its peers by 27% in the last three months.
  • We continue to think that Kossan is a laggard and share price may gain traction upon the release of its positive 2Q12 results. Maintain forecasts, BUY and TP of MYR3.75 (10x 2013 PER).
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Source: Maybank Research - 9 August 2012

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