Chyaw,
Kossan results preview from RHB.
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Top Story : Kossan – FY09 Core Net Profit To Beat FY08 Earnings Outperform
Results Preview
- Kossan is due to announce its 4QFY09 results on 24 Feb. We project full-year revenue growth of 10.7%
yoy due to stronger demand from H1N1 virus from the glove segment offset by the lower demand for its
TRP segment. We have, however, projected a higher FY09 core net profit growth as a result of margin
expansion due to more higher-value gloves being sold during the year.
- Qoq, we believe revenue growth would have been achieved mainly on the back of upward adjustments to
selling prices (latex price: 20.4% qoq) and further boosted by the stronger demand for TRP segment. We
expect full-year forex loss is approximately RM42m although we believe this would be the final quarter that
Kossan would be recognising forex losses on its hedging transactions.
- Management has indicated that commercial production for the nine new lines at its existing plant in Jalan
Meru started commercial production in Nov ’09 while its construction for its new factory in Jalan Meru has
already started.
- We are keeping our FY09-11 earnings forecasts unchanged for now.
- We maintain both our fair value RM10.22 (based on unchanged 13x CY10 EPS) and Outperform call on
the stock.
Kossan is on my shopping list...missed it Wednesday.....hope to get it on a nice dip.....