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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.
  mf Dow Jones Dow Jones Industrial Average 39,671.04 -201.95 0.50% Nasdaq NASDAQ Composite 16,801.54 -31.08 0.18% 23/05/2024 5:27 AM ChandranG Kenanga remains a glove short seller 😅 https://klse.i3investor.com/web/pricetarget/research/71369 23/05/2024 4:27 PM mf Dow Jones Dow Jones Industrial Average 39,065.26 -605.78 1.52% Nasdaq NASDAQ Composite 16,736.03 -65.51 0.38% 24/05/2024 5:15 AM ChandranG The management expects its technical rubber products division — which makes custom products ranging from dock fenders to gaskets and from insulators to industrial rollers — to be supported by a gradual increase in global economic activity and infrastructure investment 24/05/2024 7:25 PM Chipee Market sentiment bad ... see how long this last. Dow Jones and S&P will dictate that. 24/05/2024 10:20 PM Mini2021 THE ONLY AI GLOVE FACTORY: Supermax’s US factory nears completion 08 Dec 2023 Supermax Corp Bhd announced that its first glove manufacturing facility in the US is nearing completion, with the group having fulfilled and complied with various regulatory requirements, including permits, to operate the plant in Brazoria County, Texas. “Supermax’s American and Malaysian teams have been working very hard to manage the setting-up of the US operations and we are pleased to announce that construction of our first manufacturing facility will be substantially completed before the end of December 2023. The next stage will involve the installation of various manufacturing equipment including AI, automation and robotics facilities,” said Supermax executive chairman Datuk Seri Stanley Thai in a statement that was issued following the group’s annual general meeting on Friday. “A technical team from Supermax Malaysia will be deployed to the US facility in various stages for commissioning of the manufacturing facility,” Thai added. According to the group, it is the first Malaysian company to set up a glove plant in the US, the biggest glove consuming market in the world. The group, however, did not indicate when the plant, in which it planned an investment of US$350 million (RM1.6 billion), is expected to start production. It had originally targeted that to be in the fourth quarter of 2022, which was then pushed back to the second quarter of this year. Meanwhile, Thai shared with shareholders at the AGM that the group is expected to continue to face challenges for the next five to six quarters, with improvements only expected in 2025. Last month, Supermax reported a net loss of RM2.05 million for its first quarter ended Sept 30, 2023 (1QFY2024), compared to a net profit of RM5.71 million in 1QFY2023, as revenue shrunk to RM177.96 million from RM247.96 million amid weaker demand, while selling prices remained lower. It is the group’s fourth straight loss-making quarter since 4QFY2023. Still, the group has been progressively narrowing its losses each quarter. It logged a net loss of RM108.07 million in 2QFY2023, RM39.91 million in 3QFY2023 and RM7.17 million in 4QFY2023. In its results filing, Supermax attributed the losses it incurred to continued weak demand as buyers were still going through their heavily over-stocked positions post-pandemic, while it had to face a loss of revenue from a major market, the US, due to the Withhold Release Order imposed by the US Customs and Border Protection in October 2021, which was only lifted on Sept 18 this year. Shares in Supermax settled unchanged at 90 sen on Friday, giving the group a market capitalisation of RM2.44 billion. The stock has climbed five sen or 5.88% since the start of this year. Source: The Edge Malaysia 25/05/2024 7:43 AM Mini2021 Supermx: "The next stage will involve the installation of various manufacturing equipment including artificial intelligence (AI) automation and robotics facilities. "A technical team from Supermax Malaysia will be deployed to the US facility in various stages for commissioning of the manufacturing facility. 25/05/2024 7:45 AM Chipee Analyze Kossan Q1 result. Profit could had been higher if it wasn't bcoz of TAX month. They paid a big chunk in tax. Hopefully Q2 would be better. 27/05/2024 4:15 PM Chipee Yeah ... true. But they still in profit unlike Harta, PBT is a loss. And Harta has more outstanding shares than Kossan. My argument has always been Kossan shld be more or same with Harta price. So either Kossan go up or Harta comes down to meet Kossan's price. 27/05/2024 9:32 PM Chipee 2 challenging factors still looms in gloves ... ASP and demand. And this directly affects PBT. I see one factor is improving and that is DEMAND (Revenue increase for Kossan and Harta). China can't keep undercutting price. It affects their PBT too. China's lockdown is over. China lost their scale of production advantage by selling cheap. Their China demand has drastically dropped. Intco Medical made OPERATING losses in 2022 (-30,467) and 2023 (-100,958). They have to increase price in 2024. ASP will improve. Biggest bomb on China for ASP is China-US rivalry. Now just rely on entry-port ban by US on China's gloves. IF Trump wins the tariff effect will be even greater than the 2026 tariff increase. China use coal. Msia use nat gas. Both energy sources are going up in tandem. So not much difference there. Hell, if US wants to penalize China on ESG basis for using coal ... total ban on China's gloves. But we know that cannot happen la. So people who said "Don’t blame tax. Just look at PBT" are just short term investors. I'm in for the long haul. 27/05/2024 10:14 PM Chipee ABRDN bought when EPF was selling. I think their average price is below Rm1.50. So to take profit is normal. ChandranG ABRDN started to dispose the shares continuously ... 28/05/2024 5:58 PM 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  |
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