PETALING JAYA: Glovemaker Kossan Rubber Industries Bhd
is expected to perform better financially in the coming quarters on higher average selling prices (ASPs) amid challenging geopolitical conditions, supply-chain disruptions and a stronger ringgit’s impact on earnings.
Analysts remained cautiously optimistic of the company’s outlook following the release of its first quarter ended March 31, 2026 (1Q26) results last Thursday that broadly met expectations with an 11% increase in net profit, although revenue declined due to the stronger ringgit.
MBSB Research maintained a “buy” call on the stock with an unchanged target price (TP) of RM1.37, noting that oversupply, volatile oil prices and unfavourable currency movements would continue to dog the industry.
“Demand for healthcare and industrial gloves is expected to remain stable due to replenishment needs, despite the persistent global oversupply, as well as margin pressures from geopolitical risks and fluctuating raw material and energy cost.”
Analysts also pointed to the company’s measures to control what it can through automation, digitalisation, currency hedging, as well as diversifying the suite of technical rubber products.
Kenanga Research reiterated its “outperform” call with an unchanged TP of RM1.50.
It has raised ASPs this year in anticipation of higher raw material prices, leading to a slight margin improvement and a 5% rise in financial year 2026 (FY26) net profit by 5%, but maintained FY27 forecasts.
BIMB Research believes that the firm’s disciplined operational execution and relatively stronger balance sheet position should continue to support earnings stability amid the current landscape. It has upgraded the stock to a “hold” with an unchanged TP of RM1.19.
