Hartalega / Kuan Kam Hon

[winston]

Bottom likely to be seen in 2HFY3/23F

We deem 1HFY3/23 core net profit of RM116.6m (-96.3% yoy) in line with our
expectations, as we anticipate significantly weaker hoh results in 2HFY3/23.

We expect quarterly earnings to only bottom in 4QFY23F, with improvement
in sales volume and ASPs from 1QFY24F.

Upgrade to Hold, with a lower TP of RM2.10 (based on 28x CY24F P/E)

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... 1D73355A79

[winston]

vested

November 9, 2022

Analysts cut target prices for Hartalega after 97% plunge in 2Q net profit

Source: theedgemarkets.com

https://www.theedgemarkets.com/node/643216

[winston]

vested

Hartalega books 3Q net loss of RM32m, hit by glove oversupply

by Adam Aziz

Performance was also affected by higher energy and labour costs, partly offset by lower raw material costs and other operating expenses,” H

Revenue for 3QFY2023 fell 54% year-on-year (y-o-y) to RM461.84 million from RM1.01 billion.

Source: theedgemarkets.com

https://www.theedgemarkets.com/node/654232

[winston]

not vested

Hartalega's plant closure a negative sign for gloves

The decommissioning exercise will lead to an impairment loss of RM347mil in FY23 and further provision for retrenchment costs and expenses of RM70mil in FY24.

Kenanga Research revised its FY23 forecast for Hartalega to a net loss of RM33mil, down from a net profit of RM24mil previously.

It also tripled its forecast for Hartalega's net loss in FY24 to RM82mil.

Kenanga slashed Hartalega's target price to RM1.30 from RM1.35 previously, based on a sharper 50% discount to the sector's average of 1.7x book value per share charted during previous downturns in 2009-2011 and 2015-2015.

The decommissioning of the facility, which houses 30% of Hartalega's total capacity, could be the first sign of "something major" to befall the sector amid the massive industry overcapacity.

The research firm expects the overcapacity situation in the rubber glove industry to persist over the next two years, with the demand-supply situation only starting to head towards equilibrium in 2025.

Global glove production capacity is expected to rise a further 16% to 595 billion pieces during the year as incumbent and new players had made capacity expansion plans during the pandemic years, which are finally coming online.

Source: The Star

https://www.thestar.com.my/business/bus ... for-gloves

[winston]

vested

Hartalega Holdings (HART MK)
1QFY24: Storm Is Not Over Yet

Harta reported a lacklustre set of results, mainly reflecting sales volume contraction and lower utilisation which outweighed improving ASP.

Removing exceptional items, core net profit was merely breaking even at RM1.2m.

Nevertheless, some positives are noted from the sector’s depleting inventory and we expect Harta to operate with better efficiency following the decommissioning of its Bestari Jaya facility by end-23.

Maintain BUY with a lower target price of RM2.32.

Source: UOBKH

https://research.uobkayhian.com/content ... 692b6a79ac

[winston]

vested

2024, a year of risks and opportunities

Key highlights from recent concall

We recently hosted a concall with HART’s management, and gleaned three key takeaways:
i) sales volume remains volatile with a shorter order lead time,
ii) margins may come under pressure if additional costs due to higher raw material and natural gas prices cannot be passed on,
iii) restocking activities are expected to resume by 2H 2024.

We maintain our earnings forecasts and MYR2.12 TP (on 1.6x CY24E PBV; -1SD). Reiterate HOLD.

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/346602.pdf

[winston]

vested

Hartalega returns to the black in 2Q after three quarters of losses

By Isabelle Francis

Glove maker Hartalega Holdings Bhd returned to the black, with a net profit of RM27.7 million for the second quarter ended Sept 30, 2023 (2QFY2024), after registering three consecutive quarters of losses.

For 1QFY2024, it posted a net loss of RM52.47 million.

Revenue for the quarter of RM452.09 million was an improvement of 2.7% from the RM440.04 million registered for the immediate preceding quarter.

Revenue plunged 29% to RM452.09 million, from RM584.56 million a year earlier, due to lower sales volume and average selling prices (ASPs).

Source: theedgemalaysia.com

https://theedgemalaysia.com/node/689141