KUALA LUMPUR (July 20): CIMB IB Research has maintained its “Hold’ rating on Kossan Rubber Industries Bhd at RM4.40 with with a higher target price of RM4.34 (from RM3.85) and said Kossan’s 2-for-1 share split went ex on Juky 19 which enlarged its share base from 639.5 million to 1.3 billion.

In a note yesterday, the research house said while there are no fundamental changes, it expects this exercise to boost trading liquidity.

“Kossan should record stronger quarters ahead beg-2Q18. This is thanks to: i) higher sales volume, driven by Plant 16, ii) stronger US$/RM, and iii) better cost efficiencies.

“We raise our target CY19F P/E to 22.1x, from 19.6x previously. This is now based on a 20% discount to glove sector’s CY19F P/E of 27.6x.

“Ex-share split and incorporating our increase in target P/E, our target price is adjusted to RM4.34. Maintain Hold,” it said.