KUALA LUMPUR, 25 August 2025 – Shares of Kossan Rubber Industries Bhd retreated on Monday, weighed down by weaker second-quarter results. As of 2.47 pm, the counter fell 2.44% to RM1.20, after opening at RM1.24 and briefly touching an intraday high of RM1.25 before sliding to its low. Trading activity was brisk, with over 4.13 million shares changing hands.
Earnings Pressure and Market Response
The glove manufacturer’s second-quarter performance reflected operational headwinds, including production disruptions and shipment delays, which dampened investor sentiment. Nevertheless, analysts remain broadly optimistic, expecting the setback to be temporary.
RHB Research upgraded the stock from a Sell to a Buy, raising its target price to RM1.38. The research house pointed to resilience in the company’s core glove division and anticipated sequential earnings improvement in the third quarter as production bottlenecks ease.
Similarly, CIMB Securities reaffirmed its Buy call with a higher target price of RM1.65, noting that Kossan’s first-half FY25 earnings still rose 6.4% year-on-year to RM66.8 million, despite a marginal dip in revenue. The brokerage highlighted Kossan’s growing emphasis on specialty gloves—a niche segment less vulnerable to pricing pressure from Chinese competitors.
Hong Leong Investment Bank (HLIB) also maintained its Buy rating with an unchanged target price of RM2.30. HLIB reported that Kossan’s core profit after tax and minority interest (PATMI) for the first half of FY25 came in at RM60.1 million, representing a 15.3% year-on-year increase. The improvement was underpinned by better margins and a robust net cash balance of RM1.64 billion, which provides flexibility for future capacity expansion or shareholder returns.
Risks and Outlook
Analysts cautioned that near-term risks remain, including volatility in the US dollar, fluctuations in raw material prices, and weaker-than-expected sales volumes if demand softens further. However, most agree that the worst of inventory adjustments and operational disruptions is likely behind the group.
Looking ahead, market watchers expect Kossan’s earnings trajectory to strengthen in the second half of 2025, supported by stabilised production lines and an anticipated rebound in demand from key export markets, particularly the United States. The company’s continued pivot towards higher-margin specialty products is also seen as a critical driver for sustained competitiveness in a challenging post-pandemic glove market.
Broader Market Context
The glove sector as a whole continues to navigate a more normalised demand environment after the pandemic-driven boom. While oversupply and price competition remain industry-wide concerns, selective players like Kossan, with strong balance sheets and focused product strategies, are expected to consolidate market share as weaker rivals face margin pressure.
For investors, the current weakness in Kossan’s share price may present a buying opportunity, given the alignment of multiple research houses projecting upside in the coming quarters.
