May 23, 2018 08:02 am +08
KUALA LUMPUR (May 23): CIMB IB Research has maintained its “Hold” rating on Kossan Rubber Industries Bhd at RM7.25 with a lower target price of RM7.70 (from RM8.10) and said at Kossan’s analyst and media briefing yesterday, the group elaborated on: i) its expansion plans, ii) future outlook, and iii) launch of its halal-certified gloves.
In a note May 22, the research house explaind that Kossan said its new 3 billion capacity plant (F16) is finally set to begin full commercial production in July 2018.
It said the one-year delay has been due to teething issues.
“Commencement of Plants 17 and 18 still on track for end-3QCY18 and end-4QCY18, respectively. They will raise total capacity by 18% to 29.5 billion pieces per annum.
“Kossan is launching halal-certified gloves to tap the growing halal-oriented industry. The group is the first glove maker globally to receive this accreditation.
“We cut our FY18-20F EPS by 3.6-5.0% to account for: i) delays in expansion plans and ii) cost increases. Maintain Hold call, with lower target price of RM7.70 (19.6x CY19 P/E),” it said.
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