KUALA LUMPUR: Hwang DBS Vickers Research has raised the Target Price for Kossan to RM3.90 after rolling forward its valuation base to FY12F, based on 8.5 times PE.
'We raised FY11-12 EPS by 10%-11% after revising up GP margins to 14% (from 13%) on the back of Kossan's good cost management.
'Kossan's earnings are proven to be resilient despite being hit by rising latex costs and a weakening US dollar. A key re-rating catalyst for Kossan would be re-emergence of the demand cycle to lift valuations,' it said.
'We raised FY11-12 EPS by 10%-11% after revising up GP margins to 14% (from 13%) on the back of Kossan's good cost management.
'Kossan's earnings are proven to be resilient despite being hit by rising latex costs and a weakening US dollar. A key re-rating catalyst for Kossan would be re-emergence of the demand cycle to lift valuations,' it said.
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