Stock Name: KOSSAN
Company Name: KOSSAN RUBBER INDUSTRIES BHD
Research House: OSK



Kossan Rubber Industries Bhd will continue to focus on higher-end examination gloves, said OSK Research.

In its research note today, OSK said Kossan, in comparison with some of its peers, had gotten the head start by having the intention and putting the efforts to focus on the higher-end examination gloves such as the powder-free nitrile and surgical gloves.

"We understand the company will continue with efforts to upgrade its Chemax glove launched a few years ago, which yields higher product margin as well as look to producing surgical gloves starting from next year to further strengthen its presence in the higher-end examination glove market," it said.

OSK said Kossan has delivered a good set of results for the third quarter ended Sept 30, 2010.

"Its net profit was only down by 4.8 per cent quarter-on-quarter unlike some of its peers where their net profits were down between 17 per cent and 30 per cent during the corresponding period following the high latex prices and unfavorable exchange rate," it said.

For the third quarter ended Sept 30, 2010, Kossan's pre-tax increased to RM38 million from RM21 million in same quarter of 2009.

Revenue increased to RM276 million from RM210 million previously.
OSK said it would maintain its "buy" call on Kossan with the target price unchanged at RM5.25. -- Bernama