PETALING JAYA: Kossan Rubber Industries Bhd
’s latest acquisitions are set to strengthen its position in specialised rubber gloves while opening up opportunities to expand its cleanroom product distribution network.
The corporate exercise could also create new revenue streams and synergies as the group looks to differentiate itself from competitors in in China an increasingly competitive glove market.
Hong Leong Investment Bank (HLIB) Research said the proposed acquisitions of stakes in Industrial and Occupational Safety Sdn Bhd (IOS) and Industrial and Occupational Trading Sdn Bhd (IOT) are aligned with Kossan’s long-term strategy, particularly its focus on specialised rubber gloves, including cleanroom gloves.
“We view the acquisition positively, as it is aligned with Kossan’s long-term strategy of differentiating itself from Chinese peers through specialised rubber gloves, including cleanroom gloves,” the research house said.
Kossan on Tuesday announced that it had entered into share sale and purchase agreements, involving related-party transactions with multiple vendors, to acquire a 100% equity interest in IOS for RM48.4mil and a 51% stake in IOT for RM16,000 in cash.
HLIB Research said the acquisitions would allow Kossan to tap IOS’ established distribution capabilities, supported by more than three decades of experience and a proven track record in trading and distributing cleanroom products.
IOS recorded revenue of RM20.9mil and profit after tax (PAT) of RM1.8mil for 2025, translating into a PAT margin of 8.4%, compared with Kossan’s 7.3%.
The research house viewed the acquisition valuations as undemanding, with its estimates implying trailing price-to-earnings ratios of 4.7 times for IOS post-restructuring and 0.05 times for IOT.
