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 KOSSAN 7153 KOSSAN RUBBER INDUSTRIES BERHAD founder resumes share buy after EPF sold glovemaker’s securities

KUALA LUMPUR (June 17): Kossan Rubber Industries Bhd founder Tan Sri Lim Kuang Sia had in recent days raised his indirect stake in the rubber glove manufacturer after buying 7.06 million shares in his first Kossan share buy in about three months after the Employees Provident Fund (EPF) sold Kossan shares on the open market as investors evaluated the impact of the Covid-19 vaccine-led economic recovery on the rubber glove manufacturing sector.

According to Kossan’s Bursa Malaysia filings, Lim, who is also Kossan group managing director and chief executive officer, had raised his indirect stake in the company to 47.715% after he acquired 3.06 million shares in two tranches, comprising a two million share tranche on Tuesday (June 14) and 1.06 million share portion on Wednesday.

Prior to the transactions, he acquired four million shares on Monday, according to Kossan.

Kossan said Lim had bought more shares in the company via Kossan Holdings (M) Sdn Bhd.

Besides Lim's 47.715% indirect stake in Kossan, he also owns a direct stake of 0.275% in the company, according to Kossan’s Bursa filing on Thursday.

Prior to Lim’s Kossan share buy resumption in June 2022, his last Kossan share acquisition was on March 8, 2022 when he bought 946,200 shares, which raised his indirect stake to 47.438%, according to Kossan’s Bursa filing on March 9, 2022.

Lim had resumed buying Kossan shares in June 2022 after the EPF sold the glovemaker’s shares on the open market.

According to Kossan’s filing on Wednesday, the EPF had disposed of 2.75 million Kossan shares in two tranches, comprising a 2.63 million share tranche on June 9 and 121,400 share portion on June 10.

After the sale, the EPF’s direct ownership of Kossan fell to 7.641%, Kossan said.

The EPF’s direct stake had fallen to its latest-reported level from 8.781% on March 7, 2022, according to Kossan’s filing on March 10, 2022.

Looking back, Kossan was closely watched as a beneficiary of the Covid-19 outbreak which started in early 2020, as demand for rubber gloves, seen as a crucial piece of personal protective equipment, jumped to curb the global spread of Covid-19.

However, Covid-19-driven demand for gloves is now seen normalising as global vaccination progress leads to anticipation that the Covid-19 outbreak can be curbed.

Such sentiment is reflected in Kossan’s share price, which has been adjusted for the company’s one-for-one bonus share issue under which 1.28 billion bonus shares were listed and quoted on Bursa on Oct 13, 2020, according to Kossan’s Bursa filing then.

On Friday, Kossan’s share price fell one sen or 0.75% at 2:53pm to RM1.33, which gives the company a market capitalisation of about RM3.39 billion based on the group’s 2.55 billion outstanding shares.

Year-to-date, Kossan’s share price had fallen to current levels from RM1.86 on Jan 3.

Kossan is a constituent of Bursa's Health Care index, which also tracks share prices of hospital operators and pharmaceutical manufacturers.

Bursa’s research arm Bursa Digital Research said in a note on Tuesday that among the 18 analysts covering Kossan shares, eight had "buy" calls for the stock, 10 had "hold" recommendations while two had "sell" calls.

According to Bursa, these analysts have target prices of between RM1.19 and RM2.85 for Kossan shares.

"This analyst consensus compilation is based on May [2022 financial] result season of the top five companies of Bursa's Health Care Index,” Bursa said.

Bursa said the Health Care index’s top five companies are Hartalega Holdings Bhd, Kossan, Top Glove Corp Bhd, IHH Healthcare Bhd and KPJ Healthcare Bhd.

"Company with the most coverage: Top Glove Corp, covered by 23 analysts,” Bursa said.


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