KUALA LUMPUR (Jan 23): Hartalega Holdings Bhd's share price, which has exceeded analysts’ target prices, soared to close at a record high of RM11.90 today, up 32 sen or 2.76%.

The stock has gained 156% in the past 12 months from RM4.72, giving it a market capitalisation of RM19.67 billion and making it the largest glove maker in terms of market capitalisation.

However, CIMB Research downgraded its call on Hartalega to “hold” with a higher target price of RM11.35 today. This was despite the expectation of another record high quarterly net profit for the group's third financial quarter ended Dec 31, 2017 due to incoming capacity.

The downgrade is on the grounds that the nitrile glove maker’s current share price has already reflected the expected strength in its earnings growth.

CIMB’s target price of RM11.35 remains one of the highest among analysts who track the glove manufacturer. According to Bloomberg data, the consensus target price for 18 analysts was RM9.10. Twelve out of 19 analysts have a hold call on Hartalega, with four others issuing a sell recommendation on the stock.

In its note, CIMB raised its earnings per share forecasts for 2018 till 2020 by between 2.9% and 17.6% in light of the faster-than-expected commercialisation of new lines and better economies of scale.

Confident that global demand will remain robust, Hartalega has fast-tracked its expansion plans as the group is expected to run on full capacity until April given that it has achieved the sale of 30 billion gloves.

According to CIMB Research, 11 out of 12 lines have already been installed as of this month, all of which were initially targeted for installation by end-April 2018.

“We opine that the group may begin installation of Plant 5 ahead of schedule if demand outstrips its current capacity,” CIMB said.