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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 What happened to gloves in Msia will also happen in China. After China lockdown is over. 1) China gloves start making losses. (Intco Medical made OPERATING losses in 2022 (-30,467) and 2023 (-100,958).) 2) China small gloves players got eliminated. 3) Big China gloves start rationalize (reduce) their production hence impairment losses. 4) They start selling at higher ASP. As for the article from Edge https://theedgemalaysia.com/node/712277 "Hong Leong Investment Bank Research (HLIB Research), which is neutral on the sector, shares the sentiment, commenting that Chinese players will start to gradually increase their presence in European and Asian markets to reduce US orders." Are they saying China gloves are not already in European and Asia market now and the years before covid ? Of course they are. In order to compete is only to reduce price and gain market share in Europe and Asia. China cannot afford to do that. They are already making losses. China has no choice but REDUCE PRODUCTION because CHINA LOCKDOWN IS OVER. Problem with analysts on China is ... China production is BIG. Look at this data from World Bank 2019 Malaysia Export 401519 Gloves 2019 World 742,626,000 Kg Thailand Export 401519 Gloves 2019 World 109,800,000 Kg China Export 401519 Gloves 2019 World 73,646,800 Kg China is only 9.9% of Malaysia production. ------ DATA on US import of gloves in 2019 United States Import 401519 Gloves 2019 World 410,269,000 Kg United States Import 401519 Gloves 2019 Malaysia 258,422,000 Kg United States Import 401519 Gloves 2019 Thailand 68,443,400 Kg United States Import 401519 Gloves 2019 China 44,971,200 Kg Malaysia covers 63% of US import. China only 10.9%. ------ COVID presented a different situation. US allow lower quality glove from China to satisfy the demand during COVID. But the OVERSUPPLY is coming mainly from Malaysia. So the ASP problem is OVERSUPPLY WORLDWIDE. But demand is slowly recovering (Kossan and Harta revenue is increasing) as oversupply depletes. If there's concern about "flooding" the market with gloves, we should look at Topgloves instead. They are the biggest producer in the world. Not China. And TopGLove is losing money and their demand is far from their 2019 demand. They won't be flooding anytime soon. My bet is on Kossan and Harta. Their export to US will be advantageous to them when tariff hit. 28/05/2024 6:00 PM KimSua No concern on the glove fundamentals. Better to wait for a clear uptrend tmrow or fri 29/05/2024 7:22 PM Lukey_Greek When the price is right, even owner of the company & ABRDN will also dispose their shares. Good luck long term investor. 29/05/2024 8:51 PM Why_ 2024-05-29 Insider MR LIM KUANG WANG (a substantial shareholder) acquired 100,000 shares on 28-May-2024. 2024-05-29 Insider MR LIM KUANG WANG (a substantial shareholder) acquired 250,000 shares on 27-May-2024. 29/05/2024 10:29 PM mf Dow Jones Dow Jones Industrial Average 38,534.16 -318.70 0.82% Nasdaq NASDAQ Composite 16,976.85 -43.02 0.25% 29/05/2024 10:41 PM Chipee ARBDN still owns 137,392,700 shares. They sold 291,400 + 251,400 = 542,800..... 0.395% of the total shares. It's the same with TS Lim Kuang Sia and other owners .... Like I said they are doing some profit taking like day traders. Which is ok. Value traders or FA can do the same too. Just that TS Lim Kuang Sia is the CEO of the company. Show some confidence of the company la. He represents the company. Don't be a pariah CEO. THis kind of profit also want to take when he is already a billionaire. 🙄 Sometimes FA hold bcoz they are long term. Just bcoz they are long doesn't mean they didn't prone a bit to take profit. IT all depends on how many share you hold and risk management. Market is jittery bcoz US is already at all time high. IS it gonna crash or just 5% correction ... nobody knows. Lukey_Greek When the price is right, even owner of the company & ABRDN will also dispose their shares. Good luck long term investor. Long way to learn on understanding this wave fr FA perspective. 30/05/2024 2:47 AM Chipee Last time b4 2008/2009 .... when US market down, other markets can be up. It's like investors leaving one market and move to another. NOW all markets are following US market. THeir consequence affect other markets too fearing another Financial Crisis. 30/05/2024 2:55 AM Chipee YEah @5354_ I answered Repost: What happened to gloves in Msia will also happen in China. After China lockdown is over. 1) China gloves start making losses. (Intco Medical made OPERATING losses in 2022 (-30,467) and 2023 (-100,958).) 2) China small gloves players got eliminated. 3) Big China gloves start rationalize (reduce) their production hence impairment losses. 4) They start selling at higher ASP. As for the article from Edge https://theedgemalaysia.com/node/712277 "Hong Leong Investment Bank Research (HLIB Research), which is neutral on the sector, shares the sentiment, commenting that Chinese players will start to gradually increase their presence in European and Asian markets to reduce US orders." Are they saying China gloves are not already in European and Asia market now and the years before covid ? Of course they are. In order to compete is only to reduce price and gain market share in Europe and Asia. China cannot afford to do that. They are already making losses. China has no choice but REDUCE PRODUCTION because CHINA LOCKDOWN IS OVER. Problem with analysts on China is ... China production is BIG. Look at this data from World Bank 2019 Malaysia Export 401519 Gloves 2019 World 742,626,000 Kg Thailand Export 401519 Gloves 2019 World 109,800,000 Kg China Export 401519 Gloves 2019 World 73,646,800 Kg China is only 9.9% of Malaysia production. ------ DATA on US import of gloves in 2019 United States Import 401519 Gloves 2019 World 410,269,000 Kg United States Import 401519 Gloves 2019 Malaysia 258,422,000 Kg United States Import 401519 Gloves 2019 Thailand 68,443,400 Kg United States Import 401519 Gloves 2019 China 44,971,200 Kg Malaysia covers 63% of US import. China only 10.9%. ------ COVID presented a different situation. US allow lower quality glove from China to satisfy the demand during COVID. But the OVERSUPPLY is coming mainly from Malaysia. So the ASP problem is OVERSUPPLY WORLDWIDE. But demand is slowly recovering (Kossan and Harta revenue is increasing) as oversupply depletes. If there's concern about "flooding" the market with gloves, we should look at Topgloves instead. They are the biggest producer in the world. Not China. And TopGLove is losing money and their demand is far from their 2019 demand. They won't be flooding anytime soon. My bet is on Kossan and Harta. Their export to US will be advantageous to them when tariff hit. 30/05/2024 8:37 AM Chipee Trump got convicted. But he can still run for president. Democrats just hammer in their final nail to their coffin. https://www.politico.com/news/2024/05/30/can-trump-still-be-president-00160433 31/05/2024 6:36 AM KimSua The US Cpe inflation is within expectation and Ecb most likely to cut rate in June. Tuesday will be a good time to bottom pick. Good luck 01/06/2024 1:53 PM Chipee Demand is more than Supply. Price should go up. Best Buy 24010 / 152 Best Sell 4002 / 62 05/06/2024 3:17 PM Chipee No. I'm only invested in Kossan. But Harta forum is more active... so I kepoh there. 😅 To me Kossan should catch up with Harta in price. 05/06/2024 5:07 PM Iamnotasifu Kossan should at least catch up Harta Price , such underrated with highest Cash on hand and highest PAT among the Big 4 06/06/2024 6:14 PM KimSua Money is coming back in to klse. Better sharpen your technicals. Fundamentals will take a back seat, swing it well and good luck 08/06/2024 4:25 PM Chipee Yeah. I was waiting for this. Foreign funds coming in would be a good opportunity to trim down. Higher lows make it hard to swing trade on this. Unless there big news on gloves. I think next lookout is TopGlove results. 10/06/2024 11:22 AM Chipee I made a quick calculation on the data of Kossan selling at $16 per 1000 gloves. Info from here: https://www.nst.com.my/business/corporate/2024/03/1031853/kossan-rubbers-sales-may-remain-stagnant-first-half-2024-says#:~:text=The%20firm%20added%20that%20Kossan,FY23%20to%20enhance%20operating%20margins. 10/06/2024 3:06 PM Chipee I made a quick calculation on the data of Kossan selling at $16 per 1000 gloves. Q1 2024: Revenue = Rm 451,625,000 = $96,090,425 (at 4.7 xchange rate) Gloves sold per 1000 unit = $96,090,425/$16 = 6,005,652 Conclusion on SPECULATION: Kossan can sell at $17.20. China is selling at $16 too but there's a 7.5% tariff which equals to $17.20. Meaning Kossan could had make:- Revenue: 6,005,652 x $17.20 = $103,297,207 x 4.7 = Rm485,496,875 Extra profit at same cost: Rm485,496,875 - Rm 451,625,000 = Rm33,871,875 As ASP improve, Kossan can sell at higher price. Harta's ASP is $21. So Kossan has much room to move up. Just by taking ASP of $18, Kossan can easily make extra Rm56.5 million. Rm56.5 million + Rm22.2million (Q1 24 PBT) = Rm78.7million. Which is similar to 2019 quarterly earning. On Utilization Rate. Also, 6,005,652,000 per quarter means 24 billion per year. Kossan annual capacity is 32 billion in 2019. 24/32 = 75% utilization rate. This number could be lower if follows 2024 annual capacity but I don't have the number. I see improvement. I'm holding and hope to see better Q2 results as ASP is stabilizing. 10/06/2024 3:23 PM KimSua Great insight. Need confirmation of their operation efficiency and with utilzation improving to above 80%. KOSSAN should surpass Harta soon. 11/06/2024 12:40 PM Chipee @KimSua you can read Kossan automation here from The Edge: https://kossan.com.my/media/pdf/2021/MediaCoverage-TheEdgeDigitalEdge-KossanDigitalTransformation_20210329.pdf 11/06/2024 7:19 PM ChandranG Kenanga continue to short gloves 😑 https://www.enanyang.my/%E8%B4%A2%E7%BB%8F%E6%96%B0%E9%97%BB/%E8%A6%81%E4%B9%88%E4%BA%8F%E9%92%B1%E8%A6%81%E4%B9%88%E8%B5%9A%E5%B0%91-%E6%89%8B%E5%A5%97%E8%82%A1%E4%BB%8D%E9%81%AD%E6%B3%BC%E5%86%B7%E6%B0%B4 12/06/2024 4:36 PM KimSua Chipee thanks for the information. We know each quarter results will be better than the last for at least end of the year and next year US will start transition their supplier away from China. 13/06/2024 7:21 PM KimSua Cup and handle forming, high chance for a breakout next week to test recent high. The cup depth is small and handle volume is small as well. Let's see how, good luck 14/06/2024 11:26 AM KimSua Quad witching hour this friday. Trade with care, expect high volume surge and violatility due to options expiry. 19/06/2024 7:29 AM Chipee Now I'm observing 28 June. USTR is collecting opinions from their industry players on the tariff hike. I'm hoping they want it to be earlier than 2026. Old and bigger players may want to kill their small/new players in US. These new players has been "disturbing" their profit using China's gloves. We'll see. Can only hope. 19/06/2024 3:44 PM Chipee Let the data sink in for them. We will see the next week. As Kimsua highlighted, options expiring. ChandranG Sell on good news today? 19/06/2024 3:51 PM Lukey_Greek In the AGM, Mr Lim mentioned that the worst was over, however the recovery is more like a L shape, instead of V. Utilisation rate was about 60% only for Apr & May. 19/06/2024 8:13 PM Lukey_Greek The boost of USA tariff of 25% in 2026 will only have temporary effect, as China will gain more market share in Europe. The supply & demand will be rebalanced as a whole. The ASP will more or less back to 2025 level after that. 19/06/2024 8:28 PM Chipee If you have not seen the news, RIGHT parties are winning in Europe. We will see the result in UK and France election results next month. If they take over the governments, rest assure more tariff on China. I doubt China can take over Europe market. 19/06/2024 11:30 PM Albukhary When Kossan new HQ will be officially launch? Everyday I passed by it, such a nice building, very ESG style of building, especially if you compare it to Top Glove Tower. 21/06/2024 2:16 PM  | |
