KUALA LUMPUR – Hartalega Holdings Bhd's earnings are projected to hit a record high in its third financial quarter (Q3) ended December 31, surging 643% year-on-year to RM900 million, said RHB Investment Bank Bhd.
The investment bank said the growth is driven by an estimated 50% quarter-on-quarter jump in average selling price (ASP) to US$50 (RM202.25) per box of 1,000 pieces of gloves.
"As Hartalega’s ASP comes from low base of US$33.80 per box in the second quarter (of the financial year ending March 31, 2021), the magnitude of increase is likely to be higher (compared with Top Glove's increase)," it said in a note today.
RHB Investment Bank, which is maintaining a "buy" on Hartalega with a target price of RM23.50, said the rubber glove-maker is likely to release its Q3 results in two to four weeks.
On top of superb earnings, the bank said it liked Hartalega for its gold standard in Covid-19 prevention among workers.
Hartalega plans to test 10% of its workforce every week on a voluntarily basis, despite having a low Covid-19 infection rate of 0.4% of its workers.
“We are positive on this, as it should translate into operational stability – as we expect very minimal downtime due to Covid-19 in view of strict testing and precautionary measures taken,” it said.
As for risks, it said these included worse-than-expected glove demand after the end of the Covid-19 pandemic, lower-than-expected sales volume and higher-than-estimated raw material prices.
At 10.50am, Hartalega shares rose 10 sen to RM12.46 with 687,800 shares transacted. – Bernama, January 19, 2021
