KUALA LUMPUR, Nov 16 — Glove stocks topped most active counters after Kossan Rubber Industries Bhd’s surprise profit in the third quarter of financial year 2023 (3Q FY2023).
Kossan returned to the black in its 3Q, registering a net profit of RM41 million amid increased sales volume compared to a loss of RM3.3 million in 2Q FY2023.
“Kossan’s nine-month results beat expectations with a small profit of RM13 million versus our full-year net loss forecast of RM76 million and a full-year consensus net loss of RM66 million.
“The variance against our forecast came largely from lower-than-expected input costs,” Kenanga Investment Bank Bhd said in a note.
Therefore, it now projects an RM44 million net profit for Kossan in FY2023.
It also raises FY2024 earnings forecasts and lifts the target price by 5 per cent to RM1.34 from RM1.28 previously.
Public Investment Bank maintained its FY2023 forecast for Kossan but raised FY2024-2025 net profit by 15 per cent to 17 per cent as it expects the glove maker to record higher sales volume on stabilised average selling prices (ASPs) underpinned by customer re-stocking.
It also upgraded calls on Kossan from ‘underperform’ to ‘neutral’, with a higher target price of RM1.38.
“ASPs are not expected to rise meaningfully as customers are still not willing to absorb any incremental cost given the prevailing pricing competition from Chinese gloves players.
“Nevertheless, we believe the lower raw material prices and the strengthening of the US dollar would be favourable to Kossan,” it noted.
At 10am, Kossan climbed 12 sen to RM1.60, Top Glove was 2.5 sen higher at 77.5 sen, Careplus added one sen to 28.5 sen, and LKL International rose half-a-sen to 20.5 sen.
Supermax bagged two sen to 88 sen and Hartalega was one sen better at RM2.36. — Bernama
