Breaking news: Local institutions funds continue short Supermx with the expectation Supermx will not able to recover the business within this year due to prolonged low ASP

Breaking news: Mphbcap likely to be taken private for internal restructuring. Price range proposal offer could be range in between 1.60 to 1.80 which is below NTA 2.80, source said.

Breaking news: Kossan and Harta management is preparing to ramp up production volume due to increase in order after multiple customers from medical sector old stock depleted.

Breaking news: Kossan and Harta management is preparing to ramp up production volume due to increase in order after multiple customers from medical sector old stock depleted.

Breaking news: The research house said Kossan will still pay out dividends for profit-making financial years, adhering to its dividend policy of 30%.

“Kossan’s expansion plans will also be put on the back burner, as the low utilisation rate of about 50% is sufficient to cater for existing orders.

“Its cash pile accumulated during the upcycle will be crucial to help Kossan weather through the downcycle,” said HLIB Research.

The research firm maintained its “hold” call on Kossan with a lower target price of RM1, valued on a price-to-book multiple of 0.66 times.

“Despite the headwinds, we maintain our ‘hold’ rating on Kossan as we believe its strong cash position will help the group to better navigate the downturn,” it said.

Breaking news: Earnings adjustments. We forecast an FY23F core loss of MYR120m from a profit of MYR33m to account for lower effective capacity, lower utilisation rates, and a weaker USD.
SELL with higher MYR0.62 TP after tweaking our DCF assumptions. Our TP implies 0.3x FY24F P/B, against its pre-COVID-19 historical mean of 1.6x. We think SUCB’s previous aggressive expansion plans and OBM business model (typically carries high fixed costs) could be detrimental to its efforts to streamline its cost. Key risks: Higher-than-expected sales volumes, stronger- than-expected USD/ MYR, and lower-than-expected raw material prices.

Breaking news: Supermax to close down some cost inefficient plants and relocate to more efficient automated production plant to improve the bottom line cost performance. Analyst expected with this cost reduction activity, Supermax expected able to cushion the rising cost impact and low
ASP. Analyst expected likely with this exercise, Supermax able to reach break even performance.

Still give dividend, no bad

Breaking news: Supermx key stakeholder potentially proposed to acquire one of the profitable Electronic Vehicle (EV) company from excess internal funds.

Breaking news: China glove maker started to raise the selling price after old inventory clearance. Due to major cost raising burden, the increase price is unavoidable to keep the business running profitable.

Yaya, 108 mil loss, warning already give, who run today have a nice sleep

108k huge loss...who kena trap today?

Breaking news: Local institutions investment funds expected the upcoming Supermx
QR will see a bigger loss compared with previous quarters. Advised strong sell with target price 0.50

Breaking news: Local institutions investment funds expected the upcoming Kossan QR will see a bigger loss compared with previous quarters. Advised strong sell with target price 0.70.

Breaking news: KUALA LUMPUR: Hong Leong Investment Bank Bhd (HLIB) is pessimistic over Kossan Rubber Industries Bhd's' near-term prospects, plagued by soft average selling prices (ASPs), low utilisation rate and cost pressures.

HLIB trimmed its earnings forecast for Kossan for financial years 2022 (FY22), FY23 and FY24 to RM179.3 million, -RM29.4 million and RM150.9 million.

The forecasts were made as HLIB lowered its utilisation rate assumption, tweaked cost assumptions and recalibrated its ringgit against the US dollar assumption to be in line with house view.

"Glove ASPs have continued to remain soft, following normalising demand post-pandemic and glove buyers are still paring down on existing stockpiles.

"We gather that the Chinese nitrile glove players have slashed prices to US$13.50 per thousand pieces to continue defending market share, while Kossan's nitrile gloves are priced at US$16 presently.

"With idle capacity available, Kossan also took the opportunity to decommission two to three older manufacturing plants that are less efficient, and to only focus on newer and faster lines in order to improve cost efficiency," it said.

HLIB noted that the total supply in the market would be further reduced as some of the smaller-scale, local glove makers had either halted operations or entirely exited the market.

Nevertheless, it viewed that ASPs would remain depressed in the coming quarters as the demand-supply imbalance would take time to dissipate.

It added that plagued by the minimum wage revision and foreign labour shortage previously, Kossan's labour costs had remained elevated.

"The situation will be further aggravated moving into FY23, as we are expecting fuel costs and electricity costs to increase as well.

"Judging from the difficult operating conditions, we think the increase in costs will continue to exert downward pressure on Kossan's earnings, as it is rather unlikely for Kossan to raise its ASPs significantly to pass on the additional costs," it said.

Kossan expansion plans will also be put on the back burner, as the low utilisation rate of 50 per cent is sufficient to cater for existing orders.

Its cash pile accumulated during the upcycle will be crucial to help Kossan weather through the down-cycle, said HLIB.

HLIB maintained a "Hold" call on the stock with a lower target price of RM1.

Breaking news: Analyst expected to see higher loss bottom line for coming QR released. The higher cost from energy bill and labor cost plus the weak ASP will added the burden to the bottom line performance in last year. Nevertheless, 2023 will be a turnaround for Supermax from the cost cutting resulted from automation and improving ASP. Analyst continued to stand a SELL (target 0.50) call until the business environment turned into positive.

Breaking news: Coraza plan for right issue and internal funds for plant expansion from the order increased trend. Currently the plant utilisation 95%, expected to grow in next 5 years

Breaking news: Harta confident the worst is over and 2023 is the cycle to bottom out from the unfavourable business environment. 2023 expected to break even or minor profit from the high depreciation cost.

Breaking news: Local institutions funds (in short position) pre warning investors and trader about coming QR performance, expected glove company especially Topglove will continue making a huge loss. The current plant utilisation and ASP is still at loss making situation. Nevertheless, foreign fund still continues accumulating glove stock.

Breaking news: Kossan will explore to acquire new growing business with the existing strong cash flow which obtain during the Covid19 pandemic to improve the revenue pipeline and bottom line result

Breaking news: Medical sectors commented they still prefer Malaysia glove due to high quality compared with China glove with lower ASP. When they performed sourcing criteria,
China glove still far behind to meet the medical stringent requirements whereby Malaysia glove Harta and Kossan always exceeded requirements criteria.

Breaking news: One of the largest fund from Japan institutions fund is acquiring more Harta during the price weakness

Breaking news: Harta and Kosssan added more by foreign funds due to the better risk management and huge cash in balance sheet compared with Topglove

Breaking news: Coraza management will propose special dividend and bonus issue to reward shareholders

Breaking news: Local institutions funds observed reduced in short position for Topglove and Harta with recent good news of glove stocks raw material price reduced significantly which able to cushion the low ASP. Foreign funds continue acquired more Topglove and Harta

Breaking news: Cash rich company Kossan expected to reward shareholders from the excess cash which obtain during the Covid19 pandemic time with expectation Q2 2023 operational back to normal.

Breaking news; KUALA LUMPUR: Kossan Rubber Industries Bhd could be loss making in the first quarter of financial year 2023 (Q1FY23) as utilisation rate remains low at 50 per cent.

According to Public Investment Bank Bhd (PublicInvest), Kossan's earnings were expected to narrow in FY23 due to dampening average selling prices (ASPs) and escalating costs.

"As Chinese nitrile producers slashed prices to as low as US$13.50 per 1,000 pieces in November last year, ASPs are expected to remain under pressure in the coming quarters.

"Meanwhile, the average natural gas price has increased to RM64 per one million British thermal unit (MMBtu) in January 2023 from RM55 per MMBtu, while electricity cost increased by over 30 per cent. In addition, labour cost remains elevated due to supply shortage," PublicInvest said.

Although latex prices had eased, the firm said it was not sufficient to offset the impact of rising energy and labour costs.

However, Kossan's Technical Rubber Product segment should provide some cushioning effect though contribution is unlikely to grow, but to remain stable in the near term.

PublicInvest added that overall market demand remained weak with consumption falling below pre-pandemic level, mainly due to stockpiling and inflationary pressure.

"Therefore, we believe major customers would not have the urgency to place huge orders in the near term.

"Even though China is currently facing an outbreak due to the highly contagious Omicron variant known as XBB.1.5, a sudden surge in demand for imported gloves is not expected to occur as China has sufficient capacity to meet the potential increase in consumption," it said.

PublicInvest said Kossan was taking steps to reduce cost as well as conserve cash.

Despite its strong net cash position of RM1.9 billion, Kossan has placed its near-term expansion plan on hold amid oversupply issues.

"The number of its total workforce has also been cut from 7,000 to 5,000. We believe staff strength will continue to fall as Kossan adopts greater digitalisation in its production process."

PublicInvest trimmed its FY23-25 earnings forecast by 39-40 per cent to reflect lower ASPs and higher operating cost.

It also downgraded its call on Kossan to "Underperform" with a lower target price of 75 sen from RM1.23 previously.

Breaking news: Harta owner optimistic with the recover of glove ASP and plant utilisation and significant decreased of direct material price. Kossan plan to reward long term investors

Breaking news: Local institutions fund warned of retailers buy Topglove and Harta as the current ASP still non profitable position. Local institutional funds still continue short the major glove stocks

Breaking news: Glove stock worst time is over due to recovery of ASP and drastically dropped of raw material price

Breaking news: Glove manufacturers benefited from cheaper raw materials price which able to improve bottom line results significantly

Breaking news: Glove manufacturers benefited from cheaper raw materials price which able to improve bottom line results significantly

Breaking news: Kossan will surprise everyone. To be announced

Breaking news: Harta expected to show QR loss result, the ASP improvement will only see in next QR with breakeven or small loss. Stock price expected remain consolation

Breaking news: Kossan owner acquired more Kossan share in the open market in view of improved ASP and plant utilisation. Kossan owner commented the situation and market of glove market is in recovering stage, company expected to normalise profit in few quarters

Breaking news: Foreign funds continue accumulate Harta and Topglove from the expected ASP improvements, improve in book to order and plant capacity utilisation

Breaking news: Expert from institutions fund manager advise retailers not to trade contra or short term as the shorting of Harta and Topglove in an increasing trend due to the expected stock price will continue trading downward. This trend will continue till end of 2024 expectation

Breaking news: Expert from institutions fund manager advise retailers not to trade contra or short term as the shorting of Harta and Topglove in an increasing trend due to the expected stock price will continue trading downward. This trend will continue till end of 2024 expectation

Breaking news: All the world wide glove manufacturers start ramping up production after demand recovery. Most of the hospitals already used up the last year old stock, and start the new order purchasing, commented by one of the industry expert

Breaking news: Local institutions start to change position to short Inari in view long term profit target will be missed due to Apple chip alternatives strategy.

Breaking news: Local institutions fund's successful press down Harta and Topglove through the nagative news released from the media. Most of the contra player suffer tremendous loss from the intra day press down. Foreign fund's indicators showing continued buy in weak price.

Breaking news: Foreign funds continue buy more Harta and Topglove despite local institutional funds on short position

Breaking news: Local institutions continue short position to Harta and Topglove and progressively released bad news in the media

Breaking news: Most of the contra player suffered significant loss due to dumping to press down share price by institutional fund which is shorting position for Topglove and Harta. Nevertheless, foreign funds continue buying in weakness.

Breaking news: Foreign funds continue accumulating glove stock Topglove and Harta.

Breaking news: Local investment bank highly recommends to avoid glove stocks for Topglove and Harta due to extreme overcapacity.

Breaking news: Topglove world largest glove manufacturer break 0.9 resistance after foreign funds massive buy in view of positive recovery of glove demand and ASP.

Breaking news:
KUALA LUMPUR (Jan 4): Owing to a massive glut of glove supplies, glove stocks are unlikely to see a price uptick even though China is grappling with its biggest wave of Covid-19 infections following its sudden decision to ease draconian pandemic-related restrictions last month.

Analysts believe that China’s spike in cases will not improve the fundamentals of local glove stocks in the short term as the sector still faces industry-wide headwinds caused by an acute oversupply and margin compression, which has resulted in low average selling prices.

When contacted, Rakuten Trade Sdn Bhd vice president of equity research Thong Pak Leng said Malaysia's glove players will not benefit from the rapid spread of Covid-19 cases as China itself has sizeable glove production. Moreover, local glove players seldom sell their gloves to China because prices in China are even lower.

Hence, he expects the domestic glove industry to continue to face oversupply issues given their excessive inventory.

BIMB Securities Research analyst Nursuhaiza Hashim said it is still too early to gauge the outcome of China's latest move.

“It might have some knee-jerk reaction on share price if cases spike, but I am still wary to say the glove outlook will improve. Demand may slightly improve, but the current inventory level is enough to cater to [the market demand],” she added.

Nursuhaiza also expects the oversupply to remain as she believes the rising number of cases will not be as high as in the earlier phase of the pandemic because vast numbers of the population have been vaccinated.

Going forward, Nursuhaiza projects that the average selling price (ASP) for gloves will remain at the current level — averaging at US$17 (RM74.82) to US$20 per 1,000 pieces — given the stiff competition from Chinese glove makers as well as normalising demand due to the transition from pandemic to endemic.

As such, she expects earnings growth for the rubber glove sector to be lacklustre at least until the first half of 2023 (1H2023), as there are no signs of ASPs bottoming out, not to mention higher operating costs.

Malacca Securities Sdn Bhd head of research Loui Low Ley Yee said as much of the global population now is vaccinated compared to during the early stages of the outbreak in 2020, he does not foresee ASPs repeating the trend and peak of 2020.

However, he thinks the downside risks are now limited for the sector and recommends that investors relook at beaten-down glove stocks "as it is almost near the turning point".

“The [China] Covid-19 spike in cases might be the catalyst and we may accumulate now as it is downside risk limited. I think glove supply and demand will hit equilibrium this year and expect a rise in overall gloves ASP into 2023."

Both BIMB’s Nursuhaiza and Rakuten Trade’s Thong, however, are “underweight” on the sector as they believe it is not out of the woods yet.

Nursuhaiza said she maintained an “underweight” recommendation given the challenging operating environment which is expected to prolong in the foreseeable future. BIMB had “sell” calls on Hartalega Holdings Bhd (target price [TP]: RM1.70), Kossan Rubber Industries Bhd (TP: 95 sen), Top Glove Corp Bhd (TP: 58 sen) and Supermax Corp Bhd (TP: 60 sen).

On Wednesday (Jan 4), the Big Four were traded in the red. At 4pm, Top Glove shares were one sen or 1.16% lower at 85.5 sen, giving the company a market capitalisation of RM7.02 billion. Some 30.06 million shares were traded so far.

Hartalega fell three sen or 1.81% to RM1.63, which translates to a market capitalisation of 5.59 billion. Supermax dropped 1.5 sen or 1.76% to 83.5 sen, and Kossan declined three sen or 2.73% to RM1.07.

Some of their smaller counterparts were also trading lower with Careplus Group Bhd down three sen or 6.32% to 44.5 sen, while Comfort Gloves Bhd had dropped one sen or 2.11% to 46.5 sen.

Hextar Healthcare Bhd, previously known as Rubberex Corp Bhd, rose marginally by 0.5 sen or 1.37% to 37 sen.

Breaking news: China no more shortage of glove after the ramping up production quantity. ASP of glove remain positive grow due to the consistent demand.

Very excited to see 30...hehe