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Overview
Financial Highlight
HeadlinesBusiness Background Kossan Rubber Industries Bhd manufactures industrial rubber products and disposable latex gloves. The firm has three primary businesses: Technical Rubber Products, Gloves, Cleanroom Products, and Others. The Gloves segment generates the majority of revenue. The Technical Rubber Products business manufactures and distributes high technical input rubber products. The Gloves business manufactures medical grade examination gloves and specialty gloves for healthcare and industrial applications. The Cleanroom Products business sells rubber products that can be used in cleanrooms. The majority of Kossan Rubber’s revenue is generated through exports outside of Malaysia.
  Chipee I think USTR put on hold the tariff announcement after Trump-Harris debate. So Trump won't have the bullet to use in the debate. 11/09/2024 11:05 AM Chipee USTR increase tariff on glove and facemask from 25% to 50% at delayed date (Didn't mention exactly when). Facemask was supposed to be in 2024 and glove 2026. So when? 2025? https://www.reuters.com/business/us-locks-steep-china-tariff-hikes-many-start-sept-27-2024-09-13/ 13/09/2024 6:57 PM KimSua Considering the public comments, the specific direction of the President to increase tariffs on medical gloves no less than 25 percent in 2026, and the advice of the Section 301 Committee, particularly agencies involved in U.S. medical preparedness, the U.S. Trade Representative has determined to increase the rate of additional duties on medical gloves to 50 percent in 2025 and to 100 percent in 2026 From ustr website. Pls verify 13/09/2024 9:49 PM KimSua https://ustr.gov/sites/default/files/05.14.2024%20Four%20Year%20Review%20of%20China%20Tech%20Transfer%20Section%20301%20(Final).pdf 13/09/2024 9:52 PM Chipee GOOD NEWS GUYS!!! "Considering the public comments, the specific direction of the President to increase tariffs on medical gloves no less than 25 percent in 2026, and the advice of the Section 301 Committee, particularly agencies involved in U.S. medical preparedness, the U.S. Trade Representative has determined to increase the rate of additional duties on medical gloves to 50 percent in 2025 and to 100 percent in 2026." https://ustr.gov/sites/default/files/Section%20301%20Modifications%20Determination%20FRN%20(Sept%2012%202024)%20(FINAL).pdf 13/09/2024 9:55 PM KimSua Happy to share good news :) let's see how the market reacts. Will take a few days for analysts to absorb 13/09/2024 10:24 PM  Patron Gloves Sector Flash Update (UOBKH) USTR Raised China Surgical Gloves Tariffs to 50-100% In a 105-pages official announcement just released, the Office of the United States Trade Representative (USTR) announced final modifications on the statutory review of earlier tariff actions on China. This is an update from earlier proposed modifications announced in May 2024. Key updates are on: new timing and tariffs rates on face masks, medical gloves, needles, and syringes. Also includes: i) a proposal regarding coverage of additional tungsten, wafers, and polysilicon tariff lines; ii) an exclusion for ship-to-shore cranes ordered prior to May 2024; iii) an expansion of the scope of the machinery exclusions process; iv) and modification of the coverage of proposed exclusions for solar manufacturing equipment. To recall back in May, US increases higher tariff of 25% (from current 7.5%) on China’s rubber medical and surgical gloves’ exports beginning 2026. The tariffs on China medical gloves are now raised to 50% in 2025, and 100% in 2026. Refer to page 18-19 of the under medical gloves segment, “The U.S. Trade Representative has determined to increase the rate of additional duties on medical gloves to 50 percent in 2025 and to 100 percent in 2026.” This higher tariffs were not entirely a surprise, as we’ve been taking a leap of faith and highlighted possibilities of further detrimental policies towards China’s exports. Our contrarian OVERWEIGHT rating on the Malaysian glove sector were also largely premised on such potential scenario. This steep tariff hike modification on China gloves undoubtedly solidify Malaysian glove industry’s market leader position and allays earlier concerns on market share losses due to stiff competition. We expect share prices of Malaysian and Singapore glove stocks to strongly react towards this newsflow._ Maintain BUY on Harta (RM2.42/TP:RM3.66); Top Glove (RM0.915/TP:RM1.45) and Kossan (RM1.83/TP:RM2.42). Next meaningful sector event will be Top Glove’s 4QFY24 results releasing on 10th October. 14/09/2024 8:59 PM Chipee I'm wondering if Canada and EU will follow on this tariff hike? Canada has the highest chance. EU is still trying to buddy with China bcoz their luxury goods export. But China already slow a lot in luxury purchase. 16/09/2024 4:54 PM dompeilee Posted by dompeilee > 2024-01-08 08:48 I didn't manage to buy Kossan @ $1 BUT my last purchases were @ $1.2932, $1.2767 & $1.384 in June & July 2022 which more than doubled my earlier stake & lowered my average to $1.8003 & earned $322.75 in dividends to boot!🤗 After selling most of my Kossan a little too early in Jan & Mar, I SOLD 80% of my remaining stake @ $2.25 this morning. 17/09/2024 9:11 AM crackyoo Next counter to go up outside of gloves counter are their proxy, FLEXI - one of the main supplier of glove manufacturing line 17/09/2024 2:35 PM Chipee Hopefully foreign investors push it up higher. Good timing since foreigner investors coming into Msia market. 17/09/2024 4:42 PM KimSua I suspect this will not be a one day show. Will not swing too soon as the momentum is just right with feds interest rates decision on wed. The closing few hours volume continue to come in. Good luck for tmrow. 17/09/2024 7:44 PM KimSua Looking at EU and Canada tariffs on China ev and I am sure other industry will follow the precedent set by US administration. They always follow the big brother. Will scout around for the news. 17/09/2024 7:47 PM Chipee Did some research on this matter too last night. Couldn't find any ... just on EV. My suspicion is that China is experiencing deflation and tariff is necessary on China to protect markets in Europe and US. But it's long shot. US tariff is pretty good impact for now. KimSua Looking at EU and Canada tariffs on China ev and I am sure other industry will follow the precedent set by US administration. They always follow the big brother. Will scout around for the news. 17/09/2024 9:51 PM Chipee Yes, I'm observing the trend until the election. Earnings won't show up on the tariff until 2025. KimSua I suspect this will not be a one day show. Will not swing too soon as the momentum is just right with feds interest rates decision on wed. The closing few hours volume continue to come in. Good luck for tmrow. 17/09/2024 9:52 PM KimSua Ustr is a 4 Yr review cycle but one analyst mentioned 2 and down play the news. I suspect Trump to win and seal this until end 2028. China will not be able to continue to subsidize glove industry and retarget their focus. ASP will continue to rise and allow US manufacturers to start production, by then Malaysian glove industry will have a windfall in the next 4 yrs years at least. Let's see how is the profit taking today and see how foreign funds read the news. 18/09/2024 8:19 AM Chipee Yeah. Good analysis. Expect it to go up and down from day traders. By the 4 years end, China glove manufacturers could had been battered badly for Malaysian manufacturers to thrive even longer. 18/09/2024 9:17 AM NatsukoMishima Why IB never told u that China will set up factory at cheaper countries to bypass tariff ??? Try imagine what will happen to malaysia glove if they announce this step ! 18/09/2024 11:01 AM  Income Yesterday here maths +0.42 (22.95%) Today here -0.18 (8.00%) Still profit 0.24 Sen Mana rugi using maths 18/09/2024 11:15 AM Chipee In Harta forum is already told you US target China manufacturers even if their products come from Mexico or Indonesia. And here you are again talking BS. NatsukoMishima Why IB never told u that China will set up factory at cheaper countries to bypass tariff ??? Try imagine what will happen to malaysia glove if they announce this step ! 18/09/2024 11:24 AM tingpangeng This nut modus operandi is he has unloaded his holdings then will go to every glove forum to spread negativity to create fear to push down the price so that he can load the holdings again and repeat the action 18/09/2024 12:42 PM Chipee The funny thing is ... he thinks every trader here is dumb to believe him. 18/09/2024 1:17 PM Chipee With Kossan securing good earnings in coming years, I'm pretty sure they can reward good dividend too from the Rm2bill holdings. 18/09/2024 4:50 PM FullTimeTroll Nut psycho favourite thing to do is promote his highly speculative counters and talk rubbish about stocks he doesn't hold. He loves mocking others especially when they are losing money. 18/09/2024 8:13 PM Chipee Let day traders clear their holdings. Long term investors can hold until Q125 to see the effect of the tariff. Q3 & Q4 2024 is pretty much irrelevant. 19/09/2024 3:25 PM Chipee "Attractive Dividend policy"? Hahaha.... Hartalega only recently give dividend since their last dividend in 2022. Kossan has been constantly giving dividend. Sell your Hartalega and buy Kossan. Kossan should be same value as Hartalega. WDCQ_I_am_legend https://youtu.be/tkuYRBsxxxA 19/09/2024 3:56 PM Michael Lee Republican U.S. Senator Marco Rubio on Thursday proposed barring Chinese manufacturers from evading tariffs by setting up factories in other countries like Mexico, Vietnam or Malaysia. Rubio accused Chinese manufacturers of shifting production to other countries that face lower U.S. tariffs, saying it allowed them "to evade tariffs and flood the U.S. market with cheap goods." A House committee raised concerns last week about a Chinese auto parts firm that may have sought to evade tariffs. 20/09/2024 9:52 AM KimSua Issue with India restriction on chlorinated latex glove, impacting mainly Harta. 25/09/2024 9:30 PM Chipee Yeah. Harta subsidiary in India mislabel their chlorinated latex glove as non-chlorinated and sold to hospitals at cheaper price. It's really about money and tax I think. Don't think shithole of a country like India cares about the environment. https://www.medicalbuyer.co.in/hartalega-supplies-banned-chlorinated-gloves-through-mun-health-product/ 25/09/2024 11:48 PM Chipee Ok... I read the Indian article again and finally straighten things out. Typical India talking pusing pusing. ... Mun Health (buyer in India) imports non-medical gloves (chlorinated) and sell them to hospitals at cheaper price. Bcoz non-medical gloves are cheaper. Mun Health is undercutting other suppliers in India by cheating. Mun Health should be punished instead of banning Harta. Has nothing to do with Harta. Harta just sells what is ordered by Mun Health. Mun Health gets Harta to OEM the glove under "Glove-On Eureka" brand. This Indian article talk about mislabelling la for the port of entry bla bla bla .... purposely declare as non-medical so no need to submit certification la just to blame Harta ... wahlau... . 26/09/2024 12:27 AM hng33 The U.S. government announced a sharp increase in tariffs on Chinese surgical gloves, raising rates to 50% for 2025 and 100% for 2026F. The final modification imposes a much steeper tariff, which will significantly increase Chinese average selling prices (ASPs) to US$25.50/1K pcs by 2025 and US$34/1K pcs by 2026, from the current ASP of US$17/1K pcs. Given that Malaysian manufacturers' blended ASPs of US$19-21/1K pcs currently, Chinese ASPs are expected to exceed those of Malaysian producers by 21%-34% as early as next year. Hence, the reversal of the current price gap between Chinese and Malaysian gloves would enhance the competitive position of Malaysian players. Remark: Kossan export about 45-50% of its glove to US market 26/09/2024 11:28 AM hng33 The impact on USD weakness is mitigated by fact that 40% of glove manufacture cost are also denominated in USD. The remain negative impact on USD weakness can easily offset entirely by increase glove ASP which have big room of hike in 2025 by 20% from current US$19-21/1K pcs to US$25.50/1K pcs by 2025 to match Chinese glove and further 40% hike ASP potential US$34/1K pcs by 2026 match Chinese glove. Glove profitability in USD= ASP hike + globve volume sold - (feedcost in USD) Remark: The impact on USD weakness is NOT only affect Msia glove manufacture, but also affect Thai and China glove manufacture. USD weakness by 12.5% in RM USD weakness by 10.9% in Thai bath USD weakness by 3.5% in Chinese Yuan Therefore, all top 3 top global glove maker will collectively demand ASP hike to offset USD weakness 26/09/2024 12:39 PM hng33 With tumbling in crude oil price now, glove maker energy cost and major raw material cost, nitrile butadiene will decrease substantially. Both energy and raw material collectively form 20% and 30% respectively, input cost in glove manufacturing. Raw material cost is denominator in USD, offer natural hedge again weak USD Incoming US traffic 50% surcharge on competitor China glove will prompt Msia hike ASP more than offset weakness in USD. This tariff move removes the underutilization of glove makers with a very high margin. Profits are coming back 26/09/2024 10:36 PM hng33 Based on The Office of the United States Trade Representative (USTR) announced final modifications concerning the statutory review of the tariff actions in the Section 301 investigation of the People's Republic of China's (PRC) Acts, Aside Medical Gloves. Increase rate to 50 percent in 2025 and 100 percent in 2026. Another glove manufacture product, facemask also impose tax increament. Face Masks. Increase rate to 25 percent in 2025 and 50 percent in 2026. 26/09/2024 11:21 PM  | |
