Hong Leong Investment Bank (HLIB) Research has placed an on “hold” call with Kossan Rubber Industries’ target price of RM 3.19.
The research house stated that the company’s goal to maintain a balance of natural rubber and nitrile gloves can shield itself from the changing demands for the type of gloves.
“Balance product mix will allow Kossan to cater to both markets and mitigate risks from sudden price hikes in either nitrile or natural rubber latex,” HLIB Research said in a research note.
The research company also stated Kossan and other catalysts’ move to full automate and ugrade its manufacturing processes.
But, HLIB research said that the risk they are placing on Kossan fastens latex prices.
The research firm also said that they believe Kossan has been an idler in the sector because of its lack of specialisation. (RJA)