Friday 29 Mar 2024
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KUALA LUMPUR (Jan 26): Hartalega Holdings Bhd’s share price fell in Bursa Malaysia morning trade today on profit taking after climbing yesterday ahead of the rubber glove manufacturer’s quarterly financial results announcement, which showed a significant rise in net profit and revenue from a year earlier.

At 9.02am today, Hartalega’s share price was 20 sen or 1.54% lower at RM12.80.

At RM12.80, Hartalega had a market capitalisation of about RM43.9 billion.

In a Bursa filing yesterday, Hartalega said net profit rose to RM1 billion for the third quarter ended Dec 31, 2020 (3QFY21), from RM121.27 million a year earlier, while revenue climbed to RM2.13 billion from RM796.55 million.

Cumulative nine-month (9MFY21) net profit climbed to RM1.77 billion from RM319.2 million a year earlier, while revenue was higher at RM4.4 billion versus RM2.15 billion, according to the company.

For 3QFY21, Hartalega declared a dividend of 9.65 sen a share, which brought cumulative 9MFY21 dividends to 15.6 sen a share.

Today, TA Securities Holdings Bhd analyst Tan Kong Jin wrote in a note that Hartaiega’s 9MFY21 net profit of RM1.77 billion was within TA's expectations at 49.6% of its full-year projection but above the consensus estimate at 69.1% of the full-year forecast.

"We expect stronger earnings for 4QFY21 on the back of higher ASPs (average selling prices). There's no change to our FY21-FY23 earnings projections at this juncture, pending a briefing later today,” Tan said.

He said there was also no change to TA’s Hartalega share target price (TP) at RM23.60, and that TA reiterated its "buy" call on the stock.

Meanwhile, JF Apex Securities Bhd analyst Nursuhaiza Hashim wrote in a note today Hartalega’s 9MFY21 net profit of RM1.77 billion exceeded the research house’s estimate at 84.5% of its full-year forecast but below market expectations at 69% of the full-year forecast.

"In view of our lower-than-expected forecast, we lift our FY21 and FY22 net profit estimates by respective 11.1% and 20.8% by increasing our margin assumptions, coupled with higher sales volume upon full commissioning of [Hartalega’s] Plant 7.

"We maintain 'hold' with a lower TP of RM14.70 (from RM16.02 previously) as we assign a lower price-earnings ratio (PER) of 30 times CY21 (calendar year 2021) in view of the window of opportunity getting slimmer upon wide adoption of Covid-19 vaccines as well as incoming competition from new entrants (glove manufacturers), which could pose a threat to [glove] ASPs,” Nursuhaiza said.

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