Kenanga Research has maintained its ‘outperform’ call on Kossan Rubber Industries Bhd.
It has also raised its target price for the company by 16 per cent to RM4.23 in the next 12 months, driven by resilient demand for rubber gloves.
In a research note today, Kenanga Research said new cases of the bird flu outbreak in China could further underline the importance of hygiene, and potentially increase demand for examination rubber gloves, which would augur well for Kossan.
“We believe Kossan will be further re-rated, fuelled by positive news flow from its maiden foray into Indonesia, to expand its technical rubber products division following new land acquisition,” said the research house.
Despite the run-up in share price, Kenanga Research notes that Kossan was still trading at a 40 per cent discount to its larger peers.
At mid-day break, Kossan increased six sen to RM3.79 with 1.261 million shares traded.– Bernama
