Compared to it peers, KOSSAN’s Q4 result really surprised us, of which they reported a double digit growth of 28.09%, but why do they outperform their peers so much?
Here’s a review of this quarter’s performance :-
Average selling price: +7.5%
(Able to price their products from RM1 to RM1.075)
Volume Sold: +17.3%
(Able to sell 173 more pairs than last year, using 1000 pairs as a benchmark)
Natural rubber price: -19.36%
(Used to cost them RM100, now it only cost RM80.64)
USD/MYR exchange rate: -6.16%
(Used to be 1USD = 4MYR, but now it became 1USD = 3.7536MYR)
*☝️ The examples above are used for simpler calculation and easier explanation. The real metrics KOSSAN used are different.
At the same period, due to the price hike of oil (+23.74%), the cost of nitrite increased as well (+11.8%).
Does this remind you of HARTA? 🌚 But since our main topic today is KOSSAN, let’s continue reviewing the company’s prospects.
The production for their “Plant 17” is fully or close to fully optimized, which contributed 1.5 billion pair of gloves to KOSSAN annually. 😱
If this is not enough to “wow” you, their “Plant 18” and “Plant 19” is almost ready for production. It is estimated that these two plants could bring KOSSAN an additional of 5.5 billion pair of gloves in production 😱😱 WOW or WOW?
“Plant 18” – Estimated to begin production in Q2 2019, annual production rate is estimated at 2.5 billion pair of gloves
“Plant 19” – Estimated to begin production in Q4 2019, annual production rate is estimated at 3 billion pair of gloves
Some of you might question:”Can they really sell off so many pair of gloves?”
That is a great question, as we found out that KOSSAN YoY inventories level actually increased along with trade receivables. You can refer to the photo attached below 👇
But worry not, the cash flow of the company is still considered healthy. However, KOSSAN recently acquired an additional loan of RM113 million, which in turn increased the interest commitment for the company. This should alert us as an investor.
That’s about all for today’s sharing, now let’s move on to ADVERTISEMENT TIME 🤭🤭
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