Kossan Analysis Research Report
- PEGGY Method
Kossan Rubber Industries Bhd (7153)- RM3.46
Let us do my PEGGY method test:
PE: P/E ratio 9.3x, Dec 2010
G: Growth 12.7% per year. Jan 2011 - Dec 2012
G: Gearing 0.18 x. Net cash in 2012
Y: Yield (Dividend). Gross 1.5%
Figure I saw from the rhbresearch web
PE ratio is 9.3x. Ok, normal
The Growth is 12.7% per year, OK
Dividend yield- Gross 1.5%- Low side
PE average, but with 12.7% growth, ok. PE will drop to 7.3 in 2012
Many disputed on the growth rate and many forecast an oversupply of
glove from 2012.
But some said still a growing industry.
Because of uncertainty of different forecasts, you need to have high
dividend to lower your investment cost. But Kossan dividend is not so
OSK Kossan Traget price is RM5.65.
RHB Kossan Fair value is RM5.36
Up to you to judge whether glove is still a growing industry or