PETALING JAYA: Analysts have mixed views on Kossan Rubber Industries Bhd
’s earnings prospects amid the strengthening ringgit against the US dollar situation.
This was despite the glove maker’s latest financial year 2025 (FY25) results, which came in above consensus expectations.
In a report, Hong Leong Investment Bank (HLIB) Research said it had conservatively trimmed Kossan’s FY26 and FY27 forecasts by 7.9% and 5.4% respectively, primarily to factor in a lower ringgit and US dollar assumptions (RM4.05 from RM4.15 earlier) from the first quarter of FY26 onwards.
Looking ahead into the first quarter of 2026 (1Q26), the research house projected that the group’s earnings would soften quarter-on-quarter (q-o-q) .
“We expect the glove and clean-room segment to record higher q-o-q sales volume, broadly in line with peer guidance.
“This could be further supported by potential mild front-loading by the US customers following the recent US Supreme Court ruling that struck down American President Donald Trump’s sweeping global tariffs,” it added.
On pricing, HLIB Research said it pencilled in lower ringgit-denominated average selling prices (ASPs) q-o-q in our 1Q26 projection as “we expect the magnitude of ASP (in US dollar terms) adjustment to pass on the recent ringgit strength versus US dollar will be limited”.
The research house reiterated a “hold” call on Kossan and also lowered its target price to RM1.05.
Meanwhile, Kenanga Research said it is positive on Kossan’s prospects moving into FY26.
The group is optimistic that global glove demand, which continues to show early signs of stabilisation, will be supported by steady restocking activities and a gradual return to normalised consumption levels despite a moderate recovery trajectory which supports the glove industry’s long-term prospects.
“We expect Kossan to be less affected as it focuses on specialty gloves which fetch better margins,” the research house added.
Kenanga Research liked Kossan for trading at 12 times its price-to-earnings ratio, ex-cash (RM1.57bil or 61 sen per share net cash and net cash per share as of Dec 31, 2025), its solid management and focusing on specialty gloves which fetched better margins.
It maintained an “outperform” call on the stock with a new target price of RM1.50 per share.
In a report, CGS International Research reiterated a “reduced” call on Kossan with a higher target price of 85 sen from 83 sen previously.
Key upside risks include the accelerated removal of legacy glove manufacturing capacity, operational delays in new overseas Chinese capacity and ringgit depreciation against the US dollar boosting profits, according to the research house.
