Stock Name: HARTA
Company Name: HARTALEGA HOLDINGS BHD
Stock Name: KOSSAN
Company Name: KOSSAN RUBBER INDUSTRIES BHD
Alliance Research has reiterated its overweight call on the glove sector, with top picks being Hartalega and Kossan.
The research house said it remains positive on the sector in anticipation of soft and stable latex prices, the strong US dollar against the ringgit, and improving supply and demand dynamics.
It said the glove sector delivered mixed results in 1QCY13: among four stocks under coverage, one beat estimates, two disappointed while another met expectations.
"Overall, demand growth was strong (+17.7 per cent y-o-y) during the quarter, which we attribute to the global influenza trend since November 2012.
"On the flip side, the natural rubber glove segment performed weaker than expected as the nitrile glove migration wave continued to gain strength due to the widening cost advantage.
"This led to Top Glove and Supermax missing consensus estimates," said Alliance Research, which has put a target price of RM6.80 for Hartalega and RM4.85 for Kossan.-- Bernama
Company Name: HARTALEGA HOLDINGS BHD
| Research House: ALLIANCE | Price Call: BUY | Target Price: 6.80 |
Stock Name: KOSSAN
Company Name: KOSSAN RUBBER INDUSTRIES BHD
| Research House: ALLIANCE | Price Call: BUY | Target Price: 4.85 |
Alliance Research has reiterated its overweight call on the glove sector, with top picks being Hartalega and Kossan.
The research house said it remains positive on the sector in anticipation of soft and stable latex prices, the strong US dollar against the ringgit, and improving supply and demand dynamics.
It said the glove sector delivered mixed results in 1QCY13: among four stocks under coverage, one beat estimates, two disappointed while another met expectations.
"Overall, demand growth was strong (+17.7 per cent y-o-y) during the quarter, which we attribute to the global influenza trend since November 2012.
"On the flip side, the natural rubber glove segment performed weaker than expected as the nitrile glove migration wave continued to gain strength due to the widening cost advantage.
"This led to Top Glove and Supermax missing consensus estimates," said Alliance Research, which has put a target price of RM6.80 for Hartalega and RM4.85 for Kossan.-- Bernama
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