Technical tracker - HLIB Retail Research –22 Aug 2022 KOSSAN- | HLeBroking

Technical tracker - HLIB Retail Research –22 Aug 2022

KOSSAN-Anticipate a short-lived rebound

Value resurfaces after recent slump: We reckon glove players are not out of the woods yet, as the outlook continues to be clouded by the worrying oversupply situation and intensified competitions from new players (particularly from China), causing a significant plunge in glove ASPs and lacklustre utilization rates. Nevertheless, valuations have become undemanding following recent slide in glove stocks’ prices. Referring to the data shown in Figure#1, we gather that KOSSAN is currently trading at a steep 29% discount against its NTA. In terms of NCPS (net cash per share), KOSSAN has the highest NCPS to stock price ratio of 82% among its peers (vs peers’ 12-36%). We believe such attractive valuation could serve as a downside cushion

Apart from the undemanding valuation, we view KOSSAN’s relatively smaller production capacity as a redeeming feature, considering any potential increase in orders is more likely to fill up KOSSAN’s capacity sooner, thus improving the overall utilisation rate. All in, HLIB reiterates a HOLD call in KOSSAN with a TP of RM1.44.

Buy during a distressed panic sale? Looking at the historical glove counter’s share price movement pattern, we note that whenever there is a knee-jerk selldown, a relief rally is likely to happen after consolidating for 5-15days. Taking cue from last week’s huge selloff (potentially a selling climax driven by panic selling), we view it as an opportunity to buy on dips in anticipation of an oversold rebound.

Oversold rebound on the cards. Technically, KOSSAN is grossly oversold and indicators are on the mend. However, in the absence of a strong earnings catalyst from glove players, we believe the rebound will be short-lived, thus reiterating a short-term trading approach in KOSSAN. In this regard, investors are advised to take profit if KOSSAN rebounded to RM1.12-1.21-1.30 level. Cut lost at RM0.90

Collection range: RM 0.98-1.00-1.04

Upside targets: RM 1.12-1.21-1.30

Cut: RM 0.90

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KOSSAN-预计短暂的反弹

在近期股价暴跌后价值重新浮现：我们认为手套生产商目前尚未走出困境，因为令人担忧的供过于求情况和来自新的手套生产商（尤其是来自中国）竞争加剧，导致手套平均售价和利用率低迷。然而，随着最近手套股价格下跌，估值变得不高。参考图#1 中显示的数据，我们了解到 KOSSAN 目前的交易价格相对于其 NTA 有 29% 的大幅折扣。在 NCPS（每股净现金）方面，KOSSAN 的 NCPS 与股价比率在同行中最高，为 82%（同行为 12-36%）。我们认为如此吸引人的估值可作为下行的缓冲。

除了估值不高之外，我们认为 KOSSAN 相对较小的产能是一个利好，考虑到任何潜在的订单增加更有可能更快地填满 KOSSAN 的产能，从而提高整体利用率。因此，HLIB 重申对 KOSSAN 的持有评级，目标价为 RM1.44 (+38.4% 上升空间)。

恐慌性抛售中逢低购买入？从手套股的股价历史走势来看，我们注意到每当出现下意识的抛售时，在盘整 5-15 天后可能会出现技术性反弹。从上周的大规模抛售（可能是恐慌性抛售推动的抛售高潮）中得到启示，我们认为这是逢低买入的机会，并期待超卖反弹。

超跌反弹。从技术上讲，KOSSAN 严重超卖，目前技术指标正在好转。然而，在手套业者缺乏强劲盈利催化剂的情况下，我们认为反弹将是短暂的，因此重申 KOSSAN 的短期交易方式。在这方面，如果 KOSSAN 反弹至 RM1.12-1.21-1.30 的水平，建议投资者可以获利了结，并把止损设置在RM0.90

买入范围：RM 0.98-1.00-1.04

上行目标：RM 1.12-1.21-1.30

止损：RM 0.90

Report: https://www.hlib.hongleong.com.my/Published/Download.ashx?ArticleId=19196&mode=view

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